Sometimes, you can’t get your taxes done on time, so you need to file an extension to avoid any let fees or penalties. Just like your regular tax return, extension filing also has a deadline.
The IRS lets people file for a tax extension online for free. Whether you’re unable to get all the necessary tax documents by April or just need more time to file, an extension will give you some breathing room and ensure that you’re able to prepare your 2018-2019 tax return without difficulty.
How long is a tax extension?
The standard income tax extension is six months, which means your 2018 returns won’t be due until October 15, 2019, if you get an extension. Since the filing deadline ends in April, you can file for an extension any time during tax season and still have until October to submit your return.
5 Things to Know About Filing for a Tax Extension
1. You still have to pay any overdue balances.
A tax extension gives you more time to file, but it doesn’t give you more time to pay any taxes you owe.
The IRS charges failure-to-pay penalties to tax filers with overdue balances. If you don’t pay your balance off in full within 120 days, you will be charged 0.5 percent interest every month after for a maximum of 25 percent.
If you file an extension and pay at least 90 percent of your balance, you usually won’t’ face a penalty. Make sure that you contact the IRS directly and ask about the payment deadline for your taxes before filing an extension. Even if you’re granted more time to file your return, you may still owe a balance.
2. You may have to file two separate extensions.
Some states require taxpayers to file a separate tax extension request for their state and federal income taxes. Some states, including California, offer automatic tax extensions. However, others like New York, require taxpayers to submit a separate form to request an extension.
Tax extensions are filed using Form 4868. But you may have to submit a separate, state-specific form depending on where you live. Make sure you check your state tax authority to learn more about tax extension requirements.
3. It’s Free to File for a Tax Extension
If you’re scouring the internet wondering how to file a tax extension, don’t worry. The IRS makes it easy to e-file a tax extension. The tax deadline is April 15, but you can file an automatic extension online. You can also arrange payment plans for any outstanding taxes you may owe.
To file a tax extension, you’ll need to estimate your estimated total tax liability. Calculate how much you expect to owe the government in taxes and then make the payment. If you have any taxes due, you should also pay them off before you file an extension. If you’re unable to send the full balance, pay what you can afford. Then contact the IRS to talk about repayment plans.
4. You Won’t Receive Any Late Penalties if You’re Owed a Refund
Filing late doesn’t always come with fees. Sometimes, you may not file because you didn’t think you earned enough. If that’s the case, you may still be entitled to a refund. If you withheld taxes from your paycheck or qualify for credits like the Earned Income Tax Credit, you can expect a refund check.
Just because you missed the deadline doesn’t mean you shouldn’t leave your taxes unfiled. If you’re entitled to a refund, you only have three years to claim it before it’s gone forever.
5. Residents Who Live Overseas Qualify for an Automatic Deadline
If you’re a U.S. citizen or resident alien living abroad, the Irs will grant you an automatic two-month tax extension.
Citizens, resident aliens, and military personnel in combat zones living outside of the U.S. and Puerto Rico can file their taxes by June 15 (or the subsequent deadline) without penalty. Married couples who file jointly may also be eligible. However, the automatic two-month extension only applies to the qualifying spouse.
Plan Ahead for Your Tax Extension
The best way to prevent any late fees or penalties is to plan and keep your tax documents organized throughout the year. Some people find it helpful to file their taxes quarterly rather than annually, and you should explore your options and find a tax payment method that works best for you so you can avoid filing an extension every year.