The filing deadline may have shifted from April 15 to 18 this year, but for some, that makes no difference – not everyone is ready to file on time. If you are among the folks who wish there were more days before the concrete deadline, you’re in luck, because you can file for an extension. That doesn’t buy you all of the time in the world, however, so there are a few things to keep in mind if you’re going to consider the option.
Here’s what you need to know before filing for an extension:
1. You must file for an extension to receive one
Requesting an extension means you still have to file something, according to the Internal Revenue Service. Instead of filing Form 1040, you’ll file Form 4868. This application gives you a six-month extension, which means you won’t have to file your taxes until October.
If you don’t file for the extension, you’ll be penalized, according to certified public accountant Troy Lewis.
“No one should go past April 18 without filing their return or filing for an extension,” he told The Fiscal Times. “The consequences for failing to do so are just too severe.” Failing to file for an extension gets you a five-percent penalty of your tax bill per month, up to 25 percent of the total balance. Make sure your paperwork is completed and filed by the due date to avoid the consequences.
2. Anyone can file for an extension
Every taxpayer is qualified for a six-month extension, according to Glenn Brown, senior tax research analyst at the Tax Institute at H&R Block.
“It’s unbelievably easy to get an extension on your taxes,” he told The Fiscal Times. “It’s one of the few tax forms that’s not confusing.”
3. More time to file does not give you more time to pay
If you owe on your taxes this year, the extension does not give you breathing room in that aspect. The IRS is still expecting a portion of the payment from you in April, according to Curt Sheldon, president of financial planning firm C.L. Sheldon & Co. “The IRS is pretty patient about getting a return, but they’re not very patient about getting their money,” he told USA Today.
Taxpayers still need to pay owed taxes by April 18 to avoid late penalties, according to the IRS.
4. You may have to pay interest
If you don’t pay the full amount by the due date, you may have to pay interest on the difference, which builds up until you complete the payment. If you know that a late payment is unavoidable, reach out to an accountant who can estimate the amount of interest to expect.
5. If you pay electronically, you’ll get an automatic extension
You can fill out Form 4868, a written application for automatic extension of time to file, but you have a more convenient option. If you make a full or partial payment electronically by the due date, you will automatically be eligible for an extension. This is advantageous for taxpayers, especially those who are already scrambling during tax season.
If you’re interested in filing for an extension or have any questions regarding the matter, please contact me, Amy Van Fossen, at 201-806-3364.