There are times when taxpayers may need to get a tax filing extension to file their tax returns. When you need an extension you can simply file Tax Form 4868. Once filed, the extension is automatic, and you will have six months to file your tax return.
That said, if you owe taxes it’s important to note that getting an extension for filing doesn’t eliminate or reduce the tax owed. Having an extension does not extend your time to pay any taxes that are due. It only allows you more time to file your tax return. If you owe, you’ll need to pay your tax as soon as possible because you will incur penalties and fees for any tax not paid by the annual tax deadline in April.
If you aren’t sure how much to pay, you’ll want to estimate the amount you owe and send that to the IRS before the April tax filing deadline. This way, you may avoid tax penalties and fees.
Reasons to Request a Tax Filing Extension
There are several common reasons for requesting a tax filing extension. For many, it comes down to a lack of organization. One of the best ways you can be prepared to file your tax return each year is to organize your paperwork throughout the year. Other reasons to file an extension request are when various life events happen, some of which may be unintended.
1) Avoid Late Fees and Penalties
Because the IRS imposes late penalties for failing to file your taxes on time you can avoid these penalties if you are going to have to file your return after the deadline.
Remember, that if you are granted an extension to file your tax is still due in full by the April tax deadline each year. If you pay your taxes after the deadline, you will still incur late fees, interest, and penalties regardless of whether or not you have an extension to file.
2) Missing tax filing documentation
There are times when you may be missing the necessary paperwork to properly file your tax return. This may be because you’ve misplaced your employer-provided W-2 and need to obtain a replacement. If you work as an independent contractor, freelancer, or as a self-employed small business owner you may have not received all of your 1099 forms from the various clients or corporations that you provide services for.
Individuals, couples, and businesses may also receive 1099 forms from banks, or investment companies for interest earned, stock dividends, or other forms of income that you were paid for investments.
The best way to be prepared each year to file your taxes by the April deadline is to stay organized throughout the year.
3) Life events that affect your taxes
Sometimes, major life events, such as an extended illness, a new marriage, a divorce, or the passing of a loved one could cause someone to miss the tax deadline. Requesting that extension can ease the burden of trying to balance everything by a specific deadline.
Whenever there is a change to your family situation it can affect your ability to file your taxes by the tax deadline. Having the ability to apply for an extension gives you the ability to focus on these life events.
Also whenever someone is affected by a natural disaster it may be very difficult to file by the April deadline. Often in times of disaster such as fires, floods and other natural disasters vital paperwork is lost. It takes time to determine what is missing and seek replacements for everything. Filing for the extension is helpful in these situations.
4) Traveling during tax season
There are times when taxpayers may be traveling during the tax season. This happens, especially, when people live in two different states for part of the year. Retired individuals often live in alternate states for three to six months of the year. And, this puts them away from their home during tax season.
Filing your return electronically makes it easier to file tax returns on time. However, it’s possible that mail is delivered to your main household address, or wasn’t delivered to your location in time for the tax filing deadline.
If you’re expecting a refund but don’t have all the necessary paperwork to complete your filing you can request a tax return extension, then file once you return home. If however, you anticipate owing, you should file the extension request, estimate your tax, and pay the IRS by the April deadline.
5) Time and Schedule Constraints
Many people live very busy lives. Often, even with best efforts, a taxpayer may find their work schedule or family schedule is just too full to complete all the paperwork and documentation in time to file before the tax deadline.
Reasons to Not File for a Tax Filing Extension
1) You Owe Taxes
While a filing extension gives you extra time to file it does not give you extra time to pay. With the extension, if you owe taxes once your return is filed you may also have to pay penalties and interest on the tax due.
If you owe taxes you should pay your tax as soon as possible. If you can’t pay the full amount owed, you can apply for an Individual Payment Plan with the IRS. This allows you to pay a specific amount each month until the tax is paid in full. There will still be interest attached to the payment plan, but it will likely be a lower rate than you’d pay with penalties and fees for paying late without a payment plan or payment extension.
You can also request a short extension for paying your taxes. These extensions can be allowed for a 60-day to 120-day extension. However, you will still have penalties and interest will incur but at a lower rate than those who do not request a payment extension.
How to Request a Tax Filing Extension
It’s easy to file for a tax filing extension. You will need to submit form 4868 electronically or by mailing the paper to the IRS. Filing this document before the April deadline is free. It gives you more time to organize your paperwork ensuring you have everything you need to file your tax return appropriately.
4 Steps to File a Tax Filing Extension
If you’re unable to file your tax return by the original deadline, you can file for a tax filing extension to give yourself more time. In the United States, the deadline to file your tax return is typically April 15th, but you can request an extension until October 15th. Here’s how to file a tax filing extension in the United States:
Step 1: Obtain Form 4868 The first step to filing a tax filing extension is to obtain Form 4868, which is the application for an automatic extension of time to file a U.S. individual income tax return. You can download the form from the IRS website or request a paper copy by calling the IRS at 1-800-829-3676.
Step 2: Fill out Form 4868 Once you have Form 4868, you’ll need to fill it out with the necessary information. This includes your name, address, Social Security number, and estimate of your total tax liability for the year. You can use tax software or consult with a tax professional to determine your estimated tax liability.
Step 3: Submit Form 4868 You can submit Form 4868 either electronically or by mail. If you choose to file electronically, you can use the IRS’s Free File system, which is a free, secure way to prepare and file your extension request. If you choose to file by mail, be sure to mail the completed form to the address listed on the form, which varies depending on where you live.
Step 4: Pay any estimated taxes owed It’s important to note that a tax filing extension only gives you more time to file your tax return, not more time to pay any taxes owed. If you expect to owe taxes, you should pay as much as you can by the original tax filing deadline to avoid interest and penalties. If you’re unable to pay the full amount owed, you can make a payment arrangement with the IRS or explore other options for paying your taxes.
Filing for a tax return filing extension can save you from having to pay a failure to file penalty which can cost you up to 25% of your tax. Once you are granted the filing extension you can have up to six months to file your return. However, if you fail to file by the extended deadline, you will be subject to the failure to file penalty.
In conclusion, filing a tax filing extension in the United States is a straightforward process that can provide some relief if you’re unable to file your tax return by the original deadline. Just be sure to file Form 4868 by the original deadline, pay any estimated taxes owed, and seek the help of a tax professional if you need assistance with estimating your tax liability. With these steps, you can avoid penalties and interest and give yourself more time to file your tax return.
At Cowdery Tax we’re ready to help to ensure that you are able to file the most accurate return possible or to file an extension for filing. If you’re coming up on your tax filing extension deadline and need assistance, call now to book your appointment, or send us an email using the form below and we will return your message as soon as possible.
This information is not intended as legal or tax advice. Cowdery Tax and its representatives does not offer legal or tax advice. We offer services for business bookkeeping, payroll, tax payments, and personal tax filings. We share information that is publicly available. Tax laws may change with or without notice that may alter or change the information contained in this publication.