The tax deadline is quickly approaching, but if you haven’t filed your taxes yet, then chances are you may need to file an extension instead. As such, there are at least five things you need to be aware of before you file your request.
You Can E-File Your Request
That is correct! You can skip the hassle that comes with filing your extension on paper, and file directly on your computer. E-file extensions are guaranteed to be received by the IRS within 48 hours from the time you file, and you receive an email confirmation once it’s been handled. Forget waiting in line at the post office or the hand-wrenching agony of wondering if your extension has been processed. E-filing is the smart choice.
Tax Extensions Can Be Denied
When you file your extension, be careful not to make any mistakes while filling out Form 4868. Small errors and inaccuracies are enough to get your extension denied by the IRS, and you’ll be subject to a possible failure-to-file penalty. That’s why it’s important to read carefully and take your time when filling out Form 4868. Rushing will cost you more money and add unnecessary stress to your life.
Taxes Must Be Paid by April 15th (April 18th this year)
While you can postpone filing your taxes to the IRS, you cannot postpone payment! The extension you are filing is only for your paperwork, not the money you owe the government. You will be required to send in your estimated tax bill along with the payment on April 15th. Non-payment will subject you to tax penalties and interest.
If you are unable to pay your tax bill, you may want to consider using an installment loan to cover the cost of your taxes. Installment loans are a safe, affordable, and can be repaid over time with a set number of payments.
You are Required to File Both State and Federal Extensions
If you are filing a federal extension, chances are you’ll also need to file a state extension too. The requirements to file a state extension vary from state to state, so you’ll have to find out the requirements by contacting your state tax authority. Some states provide their citizens with a six month automatic extension, while others require you to request it.
Deadline is October 15th
Once you file your extension request, you have exactly six months to prepare and send in your tax paperwork to the IRS. There are no exemptions, and no excuses if you miss this deadline once your extension is granted. October 15th is the deadline so mark it on your calendar and make sure you’ve filed your paperwork on or before this date.
If you are going to file an extension, it’s important that you be prepared. Be aware of the above information, and if you can file your taxes now instead of waiting.
Will you be one of the Americans requesting a tax extension this year?
Tax detail isn't my area of expertise, so this was graciously contributed by a friend of Money Beagle.