The April 15 deadline for filing your tax returns is fast approaching. Are you worried that you may not be ready to file by then? As long as you complete Form 4868 by April 15, the IRS will grant you a six month extension to file your return.
That doesn’t mean you can avoid paying any taxes due for six months. You still need to pay your current year tax liability in full by April 15. If you don’t, you will be subject to interest and penalties. The IRS will charge you ½ percent a month on taxes you owe. If you don’t file and pay before the six month extension is up (October 15), the penalty increases to 5 percent per month up to 25 percent.
So when might filing late be necessary?
- · Missing or Inaccurate Documents – You may be waiting for documents that were lost in the mail, such as W-2’s, or for other types of corrected documents that have not arrived. If you still haven’t received replacement documents, it’s better to file an extension rather than file incorrectly. You don’t want to file your return without a W-2, as that would be a red flag to the IRS. By waiting and paying your estimated taxes, you can do things by the book and not call attention to your return.
- · Family Emergencies – If life just does not allow you to focus on your tax return, it would be better to wait to file. The reason you wait does not concern the IRS, they really just want their money on time. Rushing and making mistakes will just mean you will need to file corrections in the future.
- · Other Life Situations – Some snowbirds who head to warm climates in the winter, routinely file for extensions, and delay preparing their returns until they return to their regular accountant. The accountant will have more time to devote to their return after the April 15 deadline has passed.
So if time is running out for you, speak to your accountant about filing a Form 4868, or print out the form from the IRS website and mail it by the April 15 deadline to the IRS, along with your estimated payment.
Remember all tax situations are different. Be sure to consult your tax advisor .
The above is general information and is not to be used as tax advice.