Are you running late on your taxes? While tax laws in the United States change from year to year, the Internal Revenue Service (IRS) typically requires Americans to file their taxes by April 15. Some taxes, however, are more complex than others. Even if you’re unable to prepare and file your taxes by the due date, however, you can file an extension.
The Basics of a Tax Extension
A tax extension is exactly what it sounds like: an extension of your taxes. It extends the due date of your taxes. By filing a tax extension, you’ll have more time to prepare and file your taxes.
How a Tax Extension Works
There are a few different ways that you can file a tax extension. The IRS offers a Free File tool for tax extensions. Regardless of your income, you can use this online tool to extend the due date of your taxes. Alternatively, you can file a tax extension when paying some or all of your estimated income tax. There’s an option to file a tax extension when submitting estimated tax payments using Direct Pay, EFTPS or a credit or debit card.
Whether you use the Free File tool or the estimated payments option, you’ll have an extra six months to prepare and file your taxes after filing an extension. As previously mentioned, April 15 is typically the date on which taxes are due. A tax extension will extend the due date of your taxes to October 15.
What’s the Penalty for Filing a Tax Extension?
There’s no penalty for filing a tax extension. With that said, you’ll still have to pay all of your taxes by the normal due date, which is typically April 15.
A tax extension only extends the date by which your taxes must be filed; it doesn’t extend the date on which your tax liabilities must be paid and satisfied. If you owe money with your taxes, you must pay the IRS by the normal due date of April 15, regardless of whether you file an extension.
You should still consider filing a tax extension if you’re unable to submit your taxes by the normal due date. With a tax extension, you won’t be slapped with a late filing penalty. If you owe any money, though, you’ll need to pay the IRS by the normal due date. A tax extension works by pushing back the date by which your taxes must be filed. Contrary to common belief, it doesn’t extend the due date of tax payments.
Have anything else that you’d like to add? Let us know in the comments section below!