Did you know, you don’t have to join in the last-minute rush to file your taxes? There is an easy way to file an automatic tax extension that gives you an extra six months to file your return.
No questions asked.
It only works if you fill out the right form and send it in by the tax deadline.
If you won’t finish your tax return by April 15, find out how to file for a federal tax extension.
Why A Tax Extension?
Maybe you’re still waiting for more tax information, forms, or records. The easy answer is you just need more time. That’s why the IRS lets taxpayers automatically file an extension for the extra six months. You don’t need to tell them why. And the IRS doesn’t ask for a reason. All the IRS cares about, is that you let them know.
If you’re thinking the extension gives you more time to scrounge up the money to pay your tax bill, think again. You don’t get more time to pay your taxes.
In fact, the IRS has several penalties in place for late payments. You’ll need to pay at least 90% of the amount you owe by the tax deadline to avoid late penalties and interest charges.
Now, the idea of paying your taxes before you do your tax return might seem backwards. And it is. So you’ll have to do a quick estimate of what you owe. When you estimate your taxes, make sure it’s accurate or you’ll be stuck with penalties and a higher bill.
Failure To Pay
If you file a return or an extension but fail to pay your taxes you’ll be hit with a 0.5% late payment penalty for each month your tax bill goes unpaid. Up to a maximum of 25% of the unpaid amount. On top of that, interest is charged and added to your balance too.
Failure To File
If you don’t file a tax return or an extension and fail to pay your taxes, there is a 5% failure to file penalty for each month you don’t file and pay your taxes due. This is up to a maximum of 25% of the unpaid amount. On top of the interest charged to your balance.
So it’s better to file an extension and pay your estimated taxes by the deadline then to do nothing.
eFile A Tax Extension Online
The easiest way to file a tax extension is online. You’ll need to fill out Form 4868 and file it by the tax deadline. Any of the online tax software will let you easily eFile that form for free or you can go through the IRS website. We recommend using:
- TurboTax (read our review)
- H&R Block (read our review)
- IRS’ Free File Fillable Forms
Keep in mind, if you owe taxes, you can make payments online through the tax software or you can use one of the IRS’ electronic payment methods.
If those don’t work, just download and print out Form 4868, fill it out, and mail it in with your payment before the deadline.
