A federal tax extension is sometimes a necessity. The new year sometimes slips away, and before people know it April is here and the tax deadline is quickly approaching. Many people panic, they scramble to gather up their W2’s and head off to get their taxes done. Some people rush it, some people make mistakes, all to just get those forms in before the clock strikes midnight and the deadline is here. But, there is a way to ease that last minute panic, and frustration. People can file a Federal Tax Extension, and it’s actually quite simple.
By filing an extension, the deadline for taxes gets pushed back 6 months. Instead of a April 15th deadline, it would be an October 15th deadline. This is a great option to consider because it’s a way to avoid those late-filing penalties that the IRS tacks on to people who file their taxes past the deadlines. People should be careful though when choosing to file an extension. The extension itself pushes the due date back for the paperwork *only*. If a person owes money, then they need to do some estimation and guesswork to calculate the amount that they think they will owe. That payment is still needed by April 15th.
The process itself is quite simple. There are a few different ways that tax extensions can be accomplished. People can file EFile their extensions online using an online tax service like Turbo Tax. Otherwise, there is the old fashioned way of paper. Refer to the IRS Form 4868. Print out that form, and the instructions. Once it is completely filled out, send it to the IRS address for each particular state that the person happens to live in. A reminder again – if owing money, make sure to include the payment with that form.
Now, if a person still needs to pay taxes that are owed after mailing or filing a form, there is a way to do that. The IRS approves of different payment methods that can be completed electronically. A person can use a credit card to make their payments either by phone, or online.
There are a few important key things to keep in mind when filing for a tax extension. The first is that if a person is owing money, they need to accurately estimate that amount. If the IRS thinks that a person gave an unreasonable amount, it will not allow the extension and even assess a late filing penalty. If a person underestimates the amount of taxes owed, then that person will have to pay interest on the amount that they had not yet paid if it’s not paid in full by April 15th.
For those that live outside of the United States, it is a different from. Those people may be able to get an extension by filling out IRS Form 2350.
Overall, it’s a good idea to mark the calendar to ensue that the deadlines are met. But, for when those circumstances arise that make it impossible to make the deadline, there are exceptions. Thankfully, filing a federal tax extension is a fairly easy step, and may save people from paying those late fees.