If you can’t file your return by the April deadline, request an extension! That will give you an extra six months to file.
Did the month of April sneak up on you? Is the time until tax day already loaded with obligations? Is that pile of receipts on your desk beginning to look more and more intimidating, the prospect of filing your return by the deadline more and more remote?
Don’t worry. There’s a way you can buy yourself some extra time to get through the work of filing your return. It’s called a tax extension.
First, remember that tax day typically falls on or around April 15th. If you don’t have enough time to get your return together before then, you can apply for an extension.
Do this by filing Form 4868 [Application for Automatic Extension of Time to File U.S. Individual Income Tax Return] before April 15th. If your application is accepted, the IRS will grant you an additional six months to file. You then have until October to get everything squared away with the IRS. This is without accruing any of the penalties that normally accompany filing late.
Don’t forget to pay the IRS.
A tax extension can be great. However, while it does give you an extra six months to file, it does not give you an extra six months to pay. You still have to estimate and pay your tax liability by the normal April deadline.
When you fill out Form 4868, the same one you use to apply for an extension, you will also have to estimate your tax liability and include payment when you file the form. This is to make sure that people aren’t requesting a tax extension to avoid paying the IRS.
Even if you refuse to pay, the agency may still grant you an extension. This is only an extension of time to file; not to pay. You will be considered delinquent in the payment of your taxes. Failure-to-pay penalties and interest will begin to accrue on your unpaid tax liability.
When you finally file your return – sometime between April 15th and October 15th – the IRS will make up the difference between what you paid as your estimated tax liability and what you actually owe. If you overpaid back in April, you’ll get the difference back in the form of a refund. If you underpaid, you will have to make an additional payment.
When in doubt, file an extension.
Ultimately an extension is an awesome option for people who are buried under paperwork and need a little reprieve on completing their return. It is not a good option for people looking to avoid or delay paying their taxes.
You can request an extension right here on PriorTax starting in March. Did I mention it’s free?
Photo via Roberto Ferrari on Flickr.
Tags: tax deadline