17 Apr How to get an extension to file your taxes
Time is over to file your taxes before the April 17 deadline. Below is information you will need if you look to file for an extension in the future.
The IRS recommends finding and filing Form 4868 (Application for Automatic Extension of Time to File U.S. Individual Income Tax Return). This will automatically grant you a six-month extension until Oct. 15 to get your taxes finished and filed.
Payments are still due by the original deadline. Taxpayers should file even if they can’t pay the full amount.
Applying for an extension requires answering a few questions on Form 4868. The first part of the form asks personal information like name, address and Social Security number. The second part is tax related and asks about estimated tax liability, payments and residency.
The form asks for your estimate tax liability because it extends your time to file, it does not extend your time to pay.
By filing either a regular return or requesting an extension by the April 17 filing deadline, you will avoid the late-filing penalty, which can be 10 times as costly as the penalty for not paying.
Taxpayers who pay as much as they can by April 17 reduce the overall amount subject to penalty and interest charges. The interest rate is currently 5 percent per year, compounded daily. The late-filing penalty is typically 5 percent per month and the late-payment penalty is normally 0.5 percent per month.
In addition to having payment options, taxpayers who find that they can’t pay what they owe should know that the IRS will work with them.
Most people can set up an installment agreement with the IRS using the Online Payment Agreement tool on IRS.gov.
How to apply for an extension
By using Free File on IRS.gov to ask for an extension, the process is free, simple and fast. Besides Free File, taxpayers can request an extension through a paid tax preparer, tax-preparation software or by mailing in a paper Form 4868.
Tax forms can be downloaded from IRS.gov/forms.
Other fast, free and easy ways to get an extension include using IRS Direct Pay, the Electronic Federal Tax Payment System or by paying with a credit or debit card. There is no need to file a separate Form 4868 extension request when making an electronic payment and indicating it is for an extension. The IRS will automatically count it as an extension.
Setting up a payment plan
If you were thinking of filing an extension to get a reprieve from paying, you should use a payment plan instead.
Most individuals can set up a payment plan, including an installment agreement, with the IRS using the Online Payment Agreement application in a matter of minutes.
If you owe $50,000 or less in combined tax, penalties and interest, the payment plan gives you up to 72 months to pay it off.
With the Online Payment Agreement, no paperwork is required, there is no need to call, write or visit the IRS. Alternatively, for a long-term payment plan, you can request an installment agreement by filing Form 9465. Download the form from IRS.gov and mail it along with a tax return, IRS bill or notice.
If you need tax assistance, contact our team of professionals at Dempsey Vantrease & Follis.