Filing Extensions Without Penalties and Interest


Can’t file your tax return by the April 15th deadline?

Taxpayers can request an automatic six-month extension of time to file the tax return.  But, taxpayers beware, there is a catch!  An extension is just an extension on the time to file the return; it is NOT an extension on the time to pay!

Taxpayers are required to estimate the amount of tax that may be due with the tax return and remit payment with the extension to avoid Failure to Pay penalties.  These penalties, plus interest, could accrue from April 15 until the tax is paid, regardless of the extension.  If a balance is still owed when the actual tax return is filed, at least the penalties and interest will have been minimized.

If taxpayers are unable to file their tax return by April 15, there are several ways to request an automatic extension of time to file an individual return.  Enrolled agents and other tax professionals can e-file the Application for Automatic Extension of Time to File US Individual Tax Return (Form 4868) for taxpayers.  Or, the application can be found on the IRS website (www.irs.gov), printed and mailed to the IRS, or e-filed.  Whether taxpayers use a tax professional or submit the application themselves, all or part of the estimate of the income tax due can be paid with a check, credit/debit card, or by using the Electronic Federal Tax Payment System.

Information regarding remitting payment may be found on Form 4868. Be sure to record the confirmation number provided upon payment.

If a taxpayer estimates that they will owe taxes and is unable to pay, it is important that they file their returns timely.  Put another way, either file an extension or your completed return by April 15, even if you cannot pay the full balance due.  If you do not, Failure to File penalties will be assessed (at 5% per month times the balance not paid by April 15 up to a maximum of 25%) in addition to Failure to Pay.  You may establish a payment plan to pay the balance due.

If you receive a notice from the IRS at any time during the year, contact your tax preparer immediately.  If you did not hire one to prepare your tax return, you should then contact a licensed tax professional.  Only enrolled agents (EAs), CPAs and attorneys have unlimited rights to represent you before the IRS.  The term enrolled agent reflects that an EA can act as your “agent” before administrative levels of the IRS–meaning he or she can talk to or meet with IRS in your stead.  To find an enrolled agent in your area, visit the searchable “Find an EA” directory at http://www.naea.org.

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