Filing an IRS Tax Extension
Failure to file your income tax return when it is due can be a costly mistake. It includes a fine of up to 5% of your liability, per month. However, there is a convenient provision for obtaining an extension for filing your taxes.
Most individuals and families are required to file by the federal due date, which is on or around April 15th each year. An automatic extension for up to six months can be obtained by completing a form 4868 with the Internal Revenue Service, but the extension must be filed by or before the federal due date. Once filled, a 1040 return can be completed anytime within the six month period.
On the Form 4868 you will be asked to estimate your total tax liability. You will also be asked for the sum of all payments that have been made during the tax year, through federal withholding and estimated payments. From this you will need to determine the aproximate amount due, if any.
As with any submission to the IRS you will need to include your name, address and social security number. If you are making a payment, you will also need to fill in the amount you are paying at this time. There is a box to check if you are currently out of the country and also if you will be filing either form 1040NR or 1040NR-EZ, which are for non-residents living in the United States
Our website does offer the ability to e-file your extension electronically. We can even provide you with an acceptance confirmation number from the IRS. Plus, when you are ready to file we already have the information from your extension making filing as seamless as possible.
You do have to pay any taxes that are owed to the IRS by the federal due date, or you will owe interest on any tax that is unpaid. An extension does not provide more time to pay your tax bill just file your return. You will be charged 0.5% of the unpaid amount per month or partial month that passes until you pay the due amount. The IRS may waive these penalties if you pay more than 90% of what is owed by the regular due date and the rest by the extension due date.
There are a few exceptions for filing extensions. Someone who is living outside the country and whose main place of business is also outside the country has an automatic two month extension for filing. If longer is needed, an extension is still available, but in this case it would only add four months in addition to the two months automatically provided.
Military personnel serving in a combat zone, or in certain other hazardous situations, have special extensions that correspond to the their time abroad. These extensions are automatically provided.
Filing for an extension is always preferable to filing late or inaccurately. Just remember to pay any taxes that are owed by the federal due date, to avoid any interest or penalties.