Why File For An Extension On Taxes

Feeling Overwhelmed File A Tax Extension

Before you embark on a stress-spiral, did you know that you can file a tax extension to get up to six extra months to complete your paperwork? You dont even need a special reason. The IRS doesnt ask. All you have to do is fill out Form 4868 for individuals or Form 7004 for businesses to ask for this extension, all of which can be done for free online. Moreover, these requests have a near-100% success rate.

There are many reasons why you might want or need an extension this year. For instance, you might still be waiting for the right documentation to arrive. If your request for a W2 has gotten buried in your bosss inbox, its better to file the extension than wait and hope!

Another possibility is that your financial situation might have changed, making you feel uncertain about pulling together the right paperwork. You might have recently become unemployed, or gotten a big raise, or bought or sold a house. All of these can make tax-time more complicated. Major life events a move, a new baby, a change in jobs, illness, injury, or a death in the family, even a natural disaster may mean that its not prudent to deal with your taxes at this time. Instead, file an extension and allow yourself to prioritize what is most important to you.

Perhaps you are aware of a changing tax law that you know would benefit you in that case, it makes more sense file for an extension and wait.

Deadlines To Claim A Refund Or Credit

To qualify for a refund or credit, you must file a return within:

• three years from the original return due date , or
• two years from the payment date.

For amended returns, you must file a claim for refund or credit within:

• two years after you had to file an amended Utah return based on changes to your federal return made by the IRS, or
• three years from the original due date of the return of a loss year to report a net operating loss carryback.

This website is provided for general guidance only. It does not contain all tax laws or rules.

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How Do I File A Tax Extension

You can get a tax extension electronically or via mail. You should request an extension on or before the to avoid a late-filing penalty from the IRS.

If you dont plan to use tax software or havent decided which software to use, consider IRS Free File. The IRS partners with a nonprofit organization called the Free File Alliance to provide people who make less than $73,000 of adjusted gross income access to free, name-brand tax-prep software. Anybody even people above the income threshold can go there to file an extension online.

If you’re planning to use tax software, make sure your provider supports Form 4868 for tax extensions. Most do. You can simply follow the programs instructions and see how to file a tax extension electronically that way. The IRS will send you an electronic acknowledgment when you submit the form.

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How To File An Income Tax Extension

There are two methods to request an income tax extension: Mail Form 4868 or make a tax payment electronically. In either case, the IRS states you must file your request no later than your regular tax filing deadline. Also, filing your taxes late without a tax extension could leave you on the hook for paying tax-filing penalties.

According to the IRS, the fastest and easiest option to file a tax extension is to submit Form 4868 using the IRS Free File service. Form 4868 is a simple one-page form that asks for your name, address, Social Security number and estimated tax liability. You can also mail the completed paper form to the IRS, but make sure it is postmarked by the tax return filing deadline.

Your other option to file a tax extension is to make an electronic tax payment before the filing deadline for some or all of your estimated income tax due using Pay Online. When making your payment, note the payment is for a tax extension and save the confirmation number for your records. By doing so, the IRS will treat your note and payment as an extension request.

If you’re filing for a federal tax extension, ensure you also meet your state’s filing requirements, which may vary. The Federation of Tax Administrators offers a helpful resource to access your state’s tax agency website to discover the specific rules for your state.

If you have existing tax debt and are not sure of what to do next, an expert can also help.

Will Your Tax Refund Be Late If You File An Extension

Yes. The timeline for getting your income tax refund depends on when you file. And although you have until Oct. 15 to submit your return if you file an extension, it doesn’t mean you have to wait that long to file.

The IRS is still experiencing delays due to the pandemic and has a backlog of unprocessed returns, so in some situations, it could take much longer than the average 21 days to issue refunds. Some refunds, especially for more complicated returns or those that need corrections, could take months to arrive.

The IRS is asking taxpayers to file electronically this year and to carefully review their details before submitting to avoid any errors that could potentially delay their refund. The agency also asks that you to get your money faster.

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Penalties For Missing The Tax Deadline

Missing the tax filing deadline triggers the Failure to File Penalty. The IRS calculates this penalty as 5% of your unpaid taxes for each month your tax return is late. After 60 days, the minimum penalty goes up to $435 or 100% of what you owe, whichever is less. The penalty is capped at 25% of your unpaid taxes.

If you owe money and don’t pay by the tax deadline, you’ll also trigger the Failure to Pay Penalty. The IRS calculates this penalty as 0.5% of your unpaid taxes for each month the tax is unpaid, up to 25% of your unpaid taxes.

If you trigger Failure to File and Failure to Pay at the same time, the combined penalty is 5% for each month you were late.

There are more types of penalties, including penalties for underpayment, claiming less income than you earn, and not supplying required information.

The IRS charges interest on penalties and underpayment, and pays interest on overpayment.

Out Of Country Extension

If you are required to file a North Carolina individual income tax return and you are out of the country on the original due date of the return, you are granted an automatic four-month extension for filing your North Carolina individual income tax return if you fill in the “Out of Country” circle on Page 1 of Form D-400. “Out of Country” means you live outside the United States and Puerto Rico and your main place of work is outside the United States and Puerto Rico, or you are in military service outside the United States and Puerto Rico. The time for payment of the tax is also extended however, interest is due on any unpaid tax from the original due date until the tax is paid.

If you are unable to file your income tax return within the automatic four-month extension period, an additional two-month extension may be obtained by filling in the circle at the bottom right of Form D-410 or selecting “Y” at the “Out of country on due date prompt” on the Department’s personalized form creator. To receive the additional two-month extension, Form D-410 must be filed by August 15. Importantly, a taxpayer who is granted an automatic extension to file the corresponding State income tax return if they certify on the State return that the federal extension was granted. Consequently, an “Out of Country” taxpayer granted an automatic six-month extension to file the State income tax return will not be required to file Form D-410 to receive the additional two-month extension.

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More Help Getting A Small Business Tax Extension In 2022

While penalties for late filing can get steep, you have options when deciding to file a small business tax extension for 2021 taxes. Your best bet is to work with a Block Advisors small business certified tax pro. We can get your tax documents organized to help expedite the process of filing so you can make the tax deadline, or help you file by the tax extension deadline in 2022. Let us do the heavy lifting so you can get back to what you love.

Benefits And Downfalls Of Filing For A Tax Extension

Many people don’t know that they can request a tax-filing extension from the IRS to ask for additional time to file tax returns.

Tax extensions are not just for people who are running late in filing their taxes. There are several reasons why filing for a tax extension would be beneficial for anyone. Filing an extension is free, very easy to obtain, and the IRS will allow you up to 6 months to complete your taxes.

But is it wise to file for a tax extension? We’re sharing the benefits and downfalls of filing for a tax extension to help you make your decision.

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How Do I File An Irs Tax Extension

So, all you have to do to file an extension is fill out Form 4868. And seriously, the form just asks for basic information like your name, address and Social Security number. Youll also need to estimate your tax liability, and look up how much in federal taxes you paid . You need to report this info so you can make a tax payment to the IRS when you file your extension. If you dont owe taxes, you dont have to file an extension. But youll be missing out on a refund.

But lookif youre going through the hassle of trying to figure out your tax liability, you might as well just file your tax return. By the way, if you own a business, youll need to fill out Form 7004 .

How To File For A Tax Extension With The Irs

If you’re like millions of Americans, you might need more time to file your income taxes this year past the April 18th deadline. If so, you can request an extension with the Internal Revenue Service for six more months until Oct. 17, 2022.

Even if you’ve filed for an extension, you should pay any owed taxes to the IRS by the original April 18th deadline to avoid being penalized. It’s important to remember that an extension to file is not an extension to pay your taxes – taxes must be paid regardless.

The penalty for not filing a return by the deadline is 5 percent of the unpaid tax balance each month the tax return remains not filed. The failure to pay the penalty is much less, at 0.5 to 1 percent of the unpaid taxes, which makes filing for an extension a smart move if you need more time.

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A Tax Extension Can Help You Benefit From New Tax Laws

As you probably know, tax laws and regulations are always being modified and updated. You may find that a change in tax law makes you eligible for certain/new deductions that you couldnt claim before. This can help you lower your tax liability or get a bigger tax refund. A tax extension gives you more time to file, which means you may be able to wait until those new laws take effect before filing your tax return.

There Are No Eligibility Requirements For A Tax Extension

Any taxpayer is eligible to get a 6-month extension from the IRS. All you need to do is fill out the extension application accurately and submit it by the original deadline of your return March 15 for most businesses, and April 15 for most individuals. The IRS doesnt ask you for a particular reason or any kind of explanation.

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File Your 2018 Taxes Or Lose Out On That Money Entirely

The IRS on March 25 announced April 18 as the deadline to file taxes for 2018. Taxpayers who don’t file by this date will miss out on any money owed to them for that year and the money will automatically become the property of the US Treasury. The agency says you could lose out on not only your tax refund money, but also any earned income tax credit owed to you.

The IRS also reminds taxpayers that if they haven’t filed their 2019 or 2020 returns, their 2018 tax refund check could be held. In addition, that money can also be used to offset unpaid child support and past-due federal debts, or go towards any money owed to the IRS.

Why I File An Income Tax Extension Every Year

Tax Day in the U.S. is April 15, or the next business day if it falls on a holiday or weekend. While having over three months after the New Year to prepare taxes sounds like enough time, it isnt for many people, including me. So, instead of stressing out every year, I take advantage of the extension allowed by the Internal Revenue Service.

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Dog ate your receipts? Went out of town? Havent received all the necessary paperwork? The reason doesnt matter. In general, the IRS automatically gives you a six-month extension, if you submit Form 4868 by the April deadline. However, if you owe state income tax, some states accept the federal form, but others require you to file a separate state extension. Visit your states tax website to check the requirements and get the necessary forms.

Here are the five most common reasons to consider filing a tax extension.

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How Are Stimulus Payments Tied To 2021 Tax Returns

If the IRS owes you money for the third stimulus check due to a new qualifying dependent you gained in 2021, you can file for that payment through a recovery rebate credit when you file your taxes. You could get up to $1,400 for your dependent — that includes a new baby born or adopted. Keep an eye out for Letter 6475 from the IRS as it will have all the details you need about last year’s stimulus check when you file.

As for the first two stimulus checks, if you didn’t receive either check or received less than you qualified for, you could still be eligible to claim the money through a recovery rebate credit. You’ll either need to file a 2020 tax return if you haven’t yet, or amend your 2020 tax return if it’s already been processed.

At the end of 2021, the IRS still had some 6 million unprocessed tax returns to go through and advises you not to file a second return if your 2020 tax return still hasn’t been processed yet.

Between the child tax credit and child care expenses, you could get a lot of money back this year.

A Tax Extension Provides Peace Of Mind During The Craziness Of Tax Season

Getting more time to file your return means you can take a step back from the chaos of Aprils filing season. If you e-file a tax extension using an Authorized IRS e-file Provider like TaxExtension.com, you will receive email confirmation as soon as the IRS approves your request. You can even pay your taxes online with your extension application, thus avoiding IRS penalties and interest. You can also rest easy knowing that TaxExtension.coms robust security technology is keeping your personal data secure.

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What Does A Tax Extension Not Do

We said it earlier, but its worth repeating: A tax extension doesnt give you more time to pay your taxes. If you owe taxes, you must pay them by Tax Day. Otherwise, youll have to pay interest and late penalties.

Figuring out how much you owe without actually filling out your tax return can be tricky. The IRS offers online tools to figure out your tax bill so you can send in a payment with your extension form.

Reduce Your Tax Preparation Fees

Some accountants and even tax preparation software are free to raise their fees in the weeks leading up to the April deadline, only to drop them again during the slow spring and summer months.

Price-sensitive taxpayers can save money by shifting tax preparation to a time when their accountant is less busy and charging a lower fee.

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