How to file Federal tax extension after deadline
The excruciating amount of time and energy spent during filing taxes is one of the key reasons many do not file taxes on time. Most people have failed to meet the deadline to file in 2018 because they were either too engrossed with other work or they failed to acquire the required documents apart from some other reasons like delay and negligence. Since 1955, the Federal Tax filing day has been April 15, or the next business day if it falls on a weekend or holiday. However, despite knowing that many people postpone to the last day. Fortunately for the convenience of people unable to meet the given deadline, the Internal Revenue Service (IRS) allows Federal tax payers for an extension period of additional 6 months.
Dos and don’ts for proper Federal tax extension.
- Firstly it is very necessary to understand the important aspects and limitations of Federal tax extension. An IRS tax extension allows the filing of taxes for six months, but a not delayed payment of Federal taxes. An extension gives you some extra time to file taxes, but not extra time to pay. It is unwise to delay payment of taxes hoping for extension.
- Secondly, though an extension of six months is provided, the deadline to file Federal taxes remains 15th of April. Late fees may range between a minimum of 5% and a maximum of 25% of unpaid taxes. Addition, the failure-to-pay penalty gets added to the failure-to-file penalty. Generally, failure-to-file penalty is more than the failure-to-pay penalty.
- It is very important to file a tax extension before April 15 to avoid penalties if one is unable to do so due to some unavoidable circumstances. It can be simply done by filling up the form 4868 (for Individual) or form 7004 (for business) available on the IRS website. You have also the option of e-filing, that does not take more than 5 minutes. All you need to do is provide your name, contact and social security number. Check your state tax laws as some states require you to file a separate state extension form apart from the regular procedure.
- Do not make mistakes or provide incorrect information while filling a tax extension as IRS may disapprove your request. In most cases the IRS approves of an extension if you have missed deadline to file 2018 taxes. You can track the status of your application online.
- Lastly but most importantly do not wait for the deadline to file taxes. It is always best to file it on time, gather all the necessary documents you would need, do some research and give your best effort to file an accurate tax return so that you have to pay the minimal taxes and get the best refunds.
The IRS also offers payment alternatives apart from tax extension. You can request for an extension for a shorter period, penalties and interest will still be applicable, but at a lower rate. If you have missed deadline to file your 2018 taxes the IRS also offers taxpayers to pay in installments when they are unable to meet the deadline. Finally, the IRS advises taxpayers to consider paying due taxes with a credit card or loan. Interest on these accounts are usually lower than the combined penalties and fees you’ll pay the IRS.