How to Get an Extension on Your Taxes
Your Step by Step Guide
The Internal Revenue Service (IRS) allows taxpayers who need more time to file their tax return the option to file for a 6-month extension. This by no means changes the tax payment deadline, meaning you’ll still have to pay the money owed to the IRS when due.
However, an extension is beneficial by giving taxpayers the opportunity to get a few more months to properly file their return. In most cases, an extension is granted automatically upon applying. The form to request an extension is short, but while this process may seem like a good way to get some more time, there are some things you should know.
If you don’t think you’ll be able to get all necessary paperwork gathered by Tax Day or have an upcoming event that takes momentary priority over your tax return, here are a few things you need to know about how to file tax extension. In this guide, we’ll walk you through the basics to help you decide if it’s the best option for you.
Reasons You May Want to File an Extension
Filing for an extension is free, simple, and automatic. All taxpayers need to do is submit Form 4868, which can be done right here on our site. We make the process of doing so easy to take some stress off your shoulders. You can file tax extension online right here with us.
With this being said, there are several reasons you may need to file a tax extension. The IRS will not deny you the right to do so, but you want to be sure you have a valid reason. It’s always best to file on time. However, here are the top 4 reasons you may decide to opt for an extension:
1. You Have an Upcoming Event
Getting an extension on your tax return will relieve you from the stress that often comes with tax season. The most obvious reason to apply for tax extension is that you need more time. You may have something going on in your life that takes priority such as an upcoming event. If this happens to be the case, take these extra six months to file an extension for taxes.
Not only will these additional 6 months give you more time to file, but it will help you take advantage of all the tax benefits available to you. You will be less stressed and able to take your time to accurately file your return.
2. Awaiting Necessary Forms
Another legitimate reason you may want to file extension for taxes is that you haven’t received the forms or documents needed to file. Incomplete, inaccurate, or missing documentation are major reasons to apply for a tax filing extension. You can take this additional time to ensure your return is correct.
For example, if you are a freelancer, you may have to wait on a 1099 form, which is needed for you to compute your tax obligations. An additional reason for filing tax extension may be that you lost the W-2 given to you by your employer and are awaiting a duplicate to arrive. Any of these motives are enough reasons to file the tax extension.
3. You’ll Be Out of Town
Even if you’re out of town during tax season, you can file electronically. However, many taxpayers prefer to submit their tax documents in hard copies as opposed to electronic copies. If this happens to be the case, file for an extension if you won’t be back in town by the April deadline.
Many taxpayers go to warmer places in times of winter – sometimes for up to 6 months. If this sounds like you, consider a tax extension if you don’t want to take care of the tax return process electronically. Just be sure not to miss any deadlines as you could be penalized.
4. Busy Schedule
Let’s face it – sometimes busy schedules get in the way. It’s common for people to get busy and run out of time when it comes down to their taxes. They think they have time, and next thing they know, tax season is right around the corner.
Because tax preparers are busy, too, they sometimes advise their clients to file for an extension when they bring in their documents a week before the deadline. It’s always a good idea to plan time, but major life events happen and when they do, it’s nice to have a backup plan.
Whatever reason you have for filing an extension, understand that the IRS does not need an explanation of your situation. If you are dealing with a life event that interferes with your ability to file, all you need to do is fill out the application to file tax extension and to get some extra time. Preparing your tax return in a hurry leads to mistakes, giving you more problems in the long run.
Things to Keep in Mind
When Filing for an Income Tax Extension
An extremely important point to consider is that a tax extension will not change the tax payment deadline. One reason that you SHOULD NOT avoid filing is that you don’t have the funds to pay the amount due. The consequences to doing so will be severe – trust us, you’ll be better off if you file on time or apply for an extension on taxes!
The penalty for not filing is more severe than the penalty for not paying. A tax extension only serves the purpose of giving you 6 more months of time to file your return. Consequently, any tax liability continues to be due by the April 15th deadline.
Part of the process of filing for an extension is estimating the amount that you will owe the IRS. Any unpaid balance that isn’t paid by April 15th may accrue interests and penalties. This is a common confusion among taxpayers who file for an extension. They don’t realize that they are still subject to pay any money owed to the IRS.
Regardless of when you file, you need to pay the owed tax by the original tax filing deadline. Failure to do so will result in the IRS charging you one-half percent every month on the amount still owed after the deadline. If you don’t file a return by the extension date, this penalty increases to 5% per month, for a maximum penalty of 25%.
The Process to Apply for an Extension is Simple
One reason you need to file a tax extension is when you don’t have all the required documents needed to file. If you know you won’t be able to meet the deadline or need just a bit more time to ensure your tax return gets filed correctly, you can file for tax extension right here with us.
There aren’t any special qualifications that you need to meet to file for a tax extension. As a taxpayer, you have the right to receive an extension if needed. Keep in mind that you will get an additional six months to file when you apply for a tax extension. For example, the deadline is usually on April 15, giving you until October 15 to take care of your tax return.
If you’d like to file tax extension, you can do so right here. To get started, select the Application for Automatic Extension of Time to File U.S. Individual Income Tax Return (Form 4868). We make the application process quick and easy to give you adequate time to gather the necessary documents and properly file your return.
What If You Can’t Pay?
If you cannot pay the balance owed, you still need to file or apply for an income tax extension. The consequences for not filing are much more severe than the result of not filing. For every month that goes unpaid – with a few exceptions – you will be penalized 0.5% of the due amount.
However, if you don’t file a return or apply for an extension, you will be penalized 5% of the unpaid balance for every month that you don’t pay. There is a possibility for these penalties to be waived if the IRS considers your excuse reasonable. Again, if you cannot pay for any reason, file anyway!
If you are unable to pay, instead of not filing, you should seek other measures such as:
• Estimating how much you may or may not owe. There are online tax estimators you can use to help you with this. Getting an idea of what/will not be due gives taxpayers some extra time to get a hold of the money.
• There is a short extension you can apply for if you need extra time to pay off the balance due. This extra time gives taxpayers 60 to 120 days to pay this amount. Keep in mind that you will still be required to pay penalties and interests (at a lower rate).
• The IRS offers installment agreements to taxpayers who can’t pay their taxes when they are due. This is another good alternative to investigate that will help you avoid the harsh consequences of not paying the IRS.
• The final option that we have is to consider is paying your tax with a credit card or a loan. In most cases, you will be paying a lower interest in doing it this way than you would when you combine IRS penalties and fees.
These are the most common alternatives to consider if you cannot make the payment due to the IRS on time. Whether you are filing for a tax return extension, opt for installment payments, or will use a credit card, be sure you don’t miss the payment deadline.
The fact of the matter here is that you should never avoid paying these dues. There is no way around this, but the above alternatives could help you pay this money owed with minimal damage. Ignoring this payment will only result in largely accrued interest and a much larger amount to pay than if you had dealt with this issue on time.
File an Extension Online
Things happen, and life can get hectic at times. If you are unprepared for this upcoming tax season and need a little bit more time, apply for a tax extension right here with us. As you can see, a tax extension can come in very handy for several reasons.
We don’t recommend you file tax extension because you are unable to pay the amount due. As we mentioned above, this will not result in more time to pay the balance due. Tax extensions will only give you 6 months to file your return.
If you find yourself in the situation where you need an extension on taxes, request one today. This will buy you quite a bit of time to gather all the necessary paperwork for your returns, and you can make the process easier when you choose to file extension online. You can file for tax extension right here, directly through our site.