While it is always a nice idea to file for extensions immediately, there can also be times when you may require some more time. Perhaps you moved and you did not get time to organize all your paperwork or some unanticipated life incident is stopping you to file by the 15 April tax deadline.
Tax extension is a good move, especially if your paperwork is not organized by 15th April. And, it is not that difficult too. You just have to fill up the 4868 form by April 15, either through snail mail or electronically. After this, you will be automatically granted a tax extension for 6 months by the IRS. Moreover, you don’t have to give any explanation as to why you are asking for more time to file for extensions. So, if you need more time, you must consider the following things about tax extensions.
If you want a 6-month tax extension, you can file for it by filling up the 4868 form through a few ways. The most convenient option is to file it through e-file services, such as TurboTax Easy Extension. After E-filing your tax extension, the IRS will send you a confirmation email within 48 hours of registering. And, if you decide to take a print out and post the extension, you will have to wait at the post office, plus you will not even get a confirmation receipt from the IRS; and you will be left wondering if it has been processed or not.
Carefully fill up the 4868 form, as any inaccuracies or errors in it can lead to denial of your tax extension request by the IRS. Ensure that you have filled all the information correctly, including your social security number, name, and address. A tax extension denial can also cause you a penalty of failure-to-file.
If you owe taxes for a particular year, you are required to send your due estimated taxes to the IRS, in addition to your extension request. But, remember that tax extensions only increase the time period for filing your paperwork, and not the time period for paying taxes. This means that a tax extension request will push the deadline to Oct. 15.
If you owe taxes, you must estimate the amount, file your extension, and immediately send your payments to the IRS (latest by April 15), in order to minimize the interest and penalties. Moreover, if you feel that you are still not prepared to file, the best thing is to estimate your owed taxes and send that amount of money to the IRS. If you do this, your owed interest and penalties will only be assessed on the underpaid amount. And, if you paid something extra, the IRS will pay back the difference to you.
Most of the taxpayers who file for returns from federal income tax also file for returns from state income tax. Whereas, the IRS asks you to fill up the 4868 form for a tax extension request, every state has its own prerequisites for getting tax extensions. Some states grant automatic six-month extensions when you file for returns from state income tax, without asking you to fill up a tax extension form. And some states offer a six-month extension, along with a request. For more information, you can visit the website of your state tax authority or get it automatically from tax preparation software, such as TurboTax.
October 15th is the date till which you can file your paperwork. Check this date on your calendar, as you will exactly get only six months.
You may ask yourself that if you have to pay your taxes by 15th April anyway - what maybe the benefits of applying for a tax extension. These are several reasons why a tax extension can be beneficial for you. The main advantage of a tax extension is that it gives you extra time to organize your paperwork. This is extremely useful for people who receive a few key forms late. It is often noticed that taxpayers who have invested in S corporations or partnerships do not get their K-1s from these companies till the original due date of April 15.
Filing for a tax extension is also beneficial if you have been too busy or lazy to organize your paperwork. However, if the IRS owes your return, you must skip the tax extension and file immediately. With this, you will not be charged with a late-filing penalty, if your owed money is returned.
ERNIE BUSTAMANTE