How to file an extension on your taxes

April 17, 2017 Property, Debt, & Finances

We are closing in the April 18 tax deadline for filing of income tax returns. What can you do if you aren’t prepared to file your income taxes? Every taxpayer has the right to request an extension, and you don’t really need to give a reason. The IRS will give you one, no questions asked. The only requirement is you must ask for the extension prior to the deadline.

You will need form 4868 by the April 18 due date, which will extend the filing date to October 16, 2017. One other word of caution. If you owe money to the I.R.S., filing an extension doesn’t change the fact that you owe the money and need to pay it in, or you will face penalties and interest. A taxpayer must provide an estimated payment or face penalties. Any unpaid balance of the tax owed will result in interest being assessed, until it is paid in full. Further, a late payment penalty fee could be charged if the taxpayer does not pay at least ninety percent of the taxes that are owed in the previous year by the regular due date.

Even if the taxpayer pays nothing towards the tax due by the due date, it is still vitally important to file your taxes or an extension on April 18; failure to do so can result in a penalty for late filing that can be ten times higher than for simply making a late payment. The I.R.S. charges an additional five percent on taxes owed for each month that a taxpayer fails to pay, and a penalty of 0.5% per month on any unpaid taxes owed.

There are also increased risk of identity theft and tax fraud by waiting. Prompt and timely filing minimizes the risk that persons are able to file a fraudulent return prior to the time you as the taxpayer get around to filing your return. While filing an extension is allowed, filing the return when due still remains the best advice.

For more information about this article, contact the Law Offices of Karp & Iancu.

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