If you’ve fallen behind on your taxes and are unable to make the April deadline, you may want to file an extension. A tax extension is exactly what it sounds like: It extends the date on which your taxes are due. It will give you a little extra time to prepare and submit your taxes to the Internal Revenue Service (IRS). Maybe you’re still waiting on a 1099, or perhaps you need to collect bank statements. Regardless, you may want to file a tax extension. Before doing so, however, there are a few things you should know.
#1) 30 Days or 6 Months
Tax extensions are typically good for either 30 days or six months. Six-month extensions are the most common. Instead of submitting your taxes, you can submit them in October. But if you only need a few extra weeks to prepare your taxes, you can file a 30-day extension. There are 30-day and six-month tax extensions available.
#2) Requires Approval
You’ll have to apply for a tax extension. Tax extensions aren’t automatically granted for all tax payers. When you apply for a tax extension, you’ll either be approved or rejected. Assuming there’s nothing wrong with your status, you should be approved. But rejections can and do occur. The bottom line is that you’ll need to get approved for a tax extension.
#3) Payment Is Still Required on the Regular Due Date
Contrary to popular belief, a tax extension doesn’t extend the due date for tax payments. Rather, it only extends the date on which taxes must be filed. If you owe money on your taxes, you’ll have to submit a payment to the IRS on the regur due date — typically April 15 — regardless of whether you file an extension. A tax extension simply gives you extra time to submit your taxes to the IRS; it doesn’t give you extra time to submit payments for money owed on your taxes.
#4) Eliminates Late Filing Penalty
One of the main benefits of filing a tax extension is that it eliminates the IRS’s late filing penalty. If you submit your taxes past the due date, you’ll typically be charged a fee. A tax extension will eliminate this fee. You won’t be charged for submitting your taxes late if you file for an extension.
#5) Extensions Are Free
You can file a tax extension for free. To file a tax extension electronically, you’ll need to complete and submit Form 4868 to the IRS. Alternatively, you can mail a paper extension application to the IRS. The IRS doesn’t charge tax payers for extensions.
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