With the tax filing deadline at 11:59 tonight, the Internal Revenue Service (IRS) is reminding taxpayers that they can quickly secure an extension to file their tax returns using the IRS Free File service on IRS.gov. This extension provides an additional six months, extending the deadline to October 15.
However, the IRS points out that while the deadline to file can be extended, the deadline to pay any taxes owed remains April 15. Taxpayers are urged to file by the deadline even if they can’t pay the full amount to avoid hefty penalties.
How to Get an Extension: Taxpayers can request an extension through the IRS Free File system by submitting Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return. It is crucial to estimate your tax liability and submit the form by the April 15 deadline to avoid the late-filing penalty.
Penalties for Late Filing: If a taxpayer doesn’t file a return or an extension by April 15, they face a late-filing penalty. This penalty is typically 5% per month of the unpaid taxes and can reach up to 25% total. In comparison, the penalty for late payment is much lower, at 0.5% per month, also capping at 25%.
Paying Your Taxes: An extension to file does not mean an extension to pay. Taxpayers who owe money should try to pay as much as they can by the original April 15 deadline to minimize penalties and interest. The current interest rate on unpaid taxes is 7% per year, compounded daily.
Other Ways to Get an Extension: Besides using IRS Free File, taxpayers can also obtain an extension by making a payment through IRS Direct Pay, the Electronic Federal Tax Payment System, or using a credit card or digital wallet. By indicating that the payment is for an extension, the IRS will automatically process this as an extension request.
Support for Taxpayers Who Cannot Pay in Full: The IRS offers help for those unable to pay the full amount of taxes owed. Options include securing a loan, using a credit card, or setting up a payment plan through IRS.gov.
Special Rules for Some Taxpayers Certain groups automatically get more time to file:
- U.S. citizens and resident aliens outside the U.S. and Puerto Rico have until June 15 to file, although taxes are still due April 15.
- Military personnel serving outside the U.S. and in combat zones receive automatic extensions as well.
Disaster Relief Extensions When the President declares a disaster area, the IRS can extend filing deadlines for affected taxpayers. Those in these areas do not need to apply for an extension.
For further details on obtaining extensions and managing tax payments, visit the IRS website or consult their latest guidance and publications.
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This article, “IRS Offers Easy Online Extension for Tax Filers as Deadline Nears” was first published on Small Business Trends