When April 15, the regular tax filing deadline, approaches each year, it can create a lot of stress and pressure for many taxpayers. You might need extra time to figure out how to file self-employment taxes or just to gather all the necessary documents. Fortunately, if you miss the tax deadline, you can request a tax extension.
Getting a tax extension in 2024 is a simple and straightforward process that gives you extra time to complete your taxes correctly. Despite many myths surrounding tax extensions, here’s what you really need to know.
What is a Tax Extension?
A tax extension is a formal request to the IRS (Internal Revenue Service) for more time to prepare and submit your tax documents. It helps both individuals and businesses gather all necessary information to correctly file taxes.
Tax Extensions for the 2023 Tax Year
Everyone can apply for a tax extension for the 2023 tax year. Typically, an IRS extension gives you an extra six months to file your taxes and arrange to pay your tax bill before the new deadline.
Special rules apply to certain cases. Military members in a combat zone have 180 days after returning to the U.S. to file and pay any owed taxes. U.S. citizens living abroad get an extra two months to file, but they must pay interest on any unpaid taxes by the due date.
For more details, you can check the IRS website or consult an accountant.
Any Penalties for Filing an IRS Tax Extension?
Normally, the IRS doesn’t penalize you for filing an extension, but you must submit the extension form before the April 15 deadline. Missing this deadline can result in late filing or late payment penalties. It’s important to request the extension before the original due date to avoid these penalties.
The Late Payment Penalty
If you file your federal taxes late, the IRS can charge a late payment penalty of 0.5% of your tax liability per month until the taxes are paid in full. Though it seems small, this penalty can add up quickly, increasing your total tax bill.
The Late Filing Penalty
The IRS also imposes a late filing penalty, which is 5% per month or partial month for unpaid taxes. This penalty, however, won’t exceed 25% of the unpaid taxes. Prompt filing helps avoid this hefty penalty.
How to File an Extension for Taxes
Filing a tax extension correctly can save you a lot of stress. Here are the necessary steps:
1. Gather Necessary Information
Have your personal details ready, like your social security number, full legal name, address, and date of birth. A copy of your previous year’s tax return can also be helpful.
2. Complete IRS Form 4868
Fill out this form with all the necessary details. It’s available online or through a tax professional. You need to estimate the taxes you owe.
3. Submit Form 4868
Submit your completed form before the filing deadline. Deadlines may vary for state and federal taxes, so verify the specific deadline for your state.
4. Make a Partial Payment
If you owe money to the IRS, make at least a partial payment by the deadline to avoid interest and penalties.
5. File Before the Extension Deadline
After getting your extension, submit your tax return before the extended deadline to avoid any potential penalties or fees.
Tax Extension Rules
The IRS has rules to make filing extensions easier, especially for military members and U.S. citizens living abroad.
Deployed Military Members
Active military personnel in combat zones get an automatic extension of at least 180 days after their service ends without interest or penalties on taxes due.
U.S. Citizens Living Abroad
U.S. citizens abroad can apply for a six-month extension. They must file a form titled “Application for Extension of Time to File U.S. Income Tax Return” by the deadline, and Form 2350 if they are out of the country on the due date.
Tax Return Rejections
If your electronic tax return is rejected, you can usually correct and resubmit it. Rejections often happen due to incorrect information, so reviewing everything thoroughly before submitting helps. If the rejection is after April 15, you get an additional five days to fix errors and resubmit.
Tax Extension Tips
Filing for an extension can relieve some tax season stress. Here are some tips:
1. Consider an Installment Payment Plan
If you can’t pay in full, you may qualify for a plan. Remember, interest will accrue until the balance is paid off.
2. Keep Up With IRS Updates
Stay informed on any IRS changes to deadlines or extensions.
3. Pay Attention to State Deadlines
State tax deadlines might differ from federal deadlines.
4. Contact Tax Professionals
For help with preparing and filing your tax extension, consult a tax professional.
5. Use Electronic Filing Options
E-file options like Free File or e-file let you quickly submit returns to meet deadlines.
Your Tax Return: The Bottom Line
Applying for a tax extension in 2024 is straightforward. Show the IRS you have valid reasons like a natural disaster or military deployment for needing more time. Once approved, you have up to six more months to file.
How long is a tax extension?
You can request up to six more months to file your U.S. individual income tax return. Submit the extension request before the regular due date to avoid late filing penalties.
Can you file for a tax extension online?
Yes, you can file online, which simplifies the process. Tax software like H&R Block and Turbo Tax can help. The IRS also offers IRS Free File for electronic submission and extension requests without a fee.
Can I File an Extension and Not Pay Taxes?
Even if you file for an extension, you must still pay your taxes by the original deadline. If unsure about the exact amount, make an estimated payment to prevent late payment penalties and interest.
Can you get a tax extension beyond October 15?
Typically, no further extensions are granted beyond October 15. If you can’t file by then, contact the IRS for guidance. They might offer penalty relief if you show you truly couldn’t file on time.
Comparing Methods of Submitting a Tax Form
Choosing the best method to file a tax extension depends on your needs. Here’s a comparison:
– **E-File**
Speed: Fast
Ease of Use: High
Confirmation: Immediate
Cost: Free through IRS Free File
Ability to Pay Taxes Online: Yes
– **Paper File**
Speed: Slow
Ease of Use: Moderate to Low
Confirmation: No immediate confirmation
Cost: Free (postage costs for mailing)
Ability to Pay Taxes Online: No
– **Tax Software** (e.g., TurboTax, H&R Block)
Speed: Fast
Ease of Use: High
Confirmation: Immediate
Cost: May vary depending on the software package
Ability to Pay Taxes Online: Yes
