This is the time of year when taxpayers file their returns in April. How do you align this month with ankle-deep snow? Some individuals strive to file taxes without a hassle while during the high seas, others forget crucial document components and place them under anger to cool off.
For people who want more time, the IRS has additional time options too. If you struggle to follow through by the customary filing day, April 15th, a tax filing extension is a solution you should consider.
This guide aims to provide you with information about filling out IRS tax filing extensions.
What is an IRS Tax Filing Extensions?
A tax filing extension is when a taxpayer automatically receives more time to present their tax return to the IRS. Normally individual tax returns are due by April 15th every year.
But, should circumstances arise that prevent the individual from meeting that deadline, they also have the option to apply for an extension. A successful request pushes the deadline for filing the return back by 6 months. The new deadline is set for October 15th.
It should be noted that filing an extension for your tax return does not extend the time you are given to pay taxes that you already owe. If you anticipate owing taxes, the IRS requires that you make an estimated payment by the filing deadline (April 15).
This helps to avert penalties or interest. Extensions can only be taken for paperwork submissions and not tax payments.
Why Should You Consider Extension Application?
Below are reasons that might prompt you to apply for an extension of time within which to file a return:
Complex Tax Situations: If your tax circumstances are more complicated than average, you may need more time to go through all the financial paperwork. Such situations could be earning from several income sources, having a rental property, or investment income or losses.
Missing Documents: Sometimes, tax forms like W-2s, 1099s, or other crucial documents may arrive late or get lost in the mail. An extension can give you time to track down the missing paperwork.
Personal Circumstances: Family matters, sudden trips, and sickness are events that can prevent you from submitting your tax return. Applying for an extension will mitigate some of the pressure.
Living Abroad: Citizens of the United States or residents staying overseas are automatically granted extensions, but those extensions have to be applied for. Taxpayers living abroad are given an extension of two months for submitting the tax returns, and therefore, the correct forms, meant specifically for overseas filers, have to be submitted.
Overwhelmed by Tax Filing: Tax filing is a cumbersome process, especially when you do it for the first time. Filing an extension will mean that you don’t have to fear the filing deadline so you can file all the documentation without rushing and missing some deductions or credits.
How To Apply For An IRS Tax Filing Extension
There are several ways of filing an extension for the tax return directly with the IRS. Here is an explanation for each of them.
1. File IRS Form 4868
The most straightforward way to file for an extension is by filing Form 4868 (“Application for Automatic Extension of Time to File U.S. Individual Income Tax Return”). This form allows for a six-month extension of the tax return due date. Always remember that this extension applies to the filing date only, not to the payment deadline, so plan for that.
Step-by-Step Guide for Filing Form 4868
Download the Form: For low-complexity cases, filling out the form is relatively simple. It only has primitive details like name, address, social security number, and the estimated tax owed. If you are better off filing by mail, it’s available for download from the IRS site. Afterward, send it to your designated office after filling it.
Submit Electronically: Along with being much simpler, it also cuts down processing times significantly. Therefore, Form 4868 should preferably be submitted electronically. This is where the IRS Free File program or IRS Certified e-filing programs come into use. Not only do you avoid the mailing bottlenecks, but you also reap the benefits of instant confirmation.
Mailing the Form: If you wish to apply manually, you are permitted to mail it. However, make certain to follow the given instructions, as there is a high chance of penalties if you fail to apply correctly. Further, depending on your reference point, mailing it operates on a slower timeframe, further highlighting the necessity to send the application before the March 15 deadline.
Deadline for Submission: For the submission to be valid, it is vital to highlight the automatic extension that is permitted for the submission of individual tax returns. While one may assume the deadline is set to March 15, it is encouraged to apply as soon to avoid problems with the IRS systems. Further, admitting the capital gain you are flexible on applying towards an automatic extension for six months on capital gains tax.
2. Use IRS Online Tools
There are online tools available on the IRS website for individuals when it comes to filing extensions and other important documents such as the IRS Direct Pay System. The system permits you to pay estimated taxes alongside applying for an extension which benefits many individuals together with making processing smooth.
Bear in mind, that this system isn’t complex, nor does it fully substitute a tax return, but it’s preferred for individuals who face issues around tax bills.
How to use the IRS online tools.
- Start by going to the IRS webpage and sending your tax extension using their Direct Pay system. If your income qualifies, you can electronically file Form 4868 for free using the Free File system.
- You will be asked to give details of your tax situation, such as an estimate of the taxes owed and if necessary, process the payment.
3. Pay for the Taxes Owed by Estimation
While extending, if you think there might be outstanding payments, it is prudent to pay an estimation while filing for the extension. An extension only gives you more time for filing, but not for payments. IRS compliance mandates that any payments needed be made by the April 15th deadline.
Even if satisfying a payment seems hard, you should always pay what is feasible. This way you lessen the penalties and interest due while trying to pay off the taxes owed. Payments for these taxes can be made to the IRS through their online portal, phone, or postal service. You must get the evidence of these payments for your record purposes.
4. Wait for IRS Confirmation
Confirmation whether granted can be sent through an email or physically depending on your filing method. For electronic filing, you will almost receive an instant confirmation which you can also print.
Confirmation through a mailed extension means waiting longer than usual, as this comes from the IRS.
One must understand that the IRS-filed confirmation extension paper comes in handy in proving that a request sent was indeed approved.
Important Things to Remember About IRS Tax Filing Extensions
Payment Remains Due on Original Deadline: As the name suggests, an extension of the deadline is meant for filing only. Extensions are wonderful but if any taxes are owed, they should have been paid before the deadline of the original due date so the taxpayer does not incur any additional penalties with interest charges.
Automatic Approval: With no documentation required, the IRS automatic approval extension removes a whole other burden. If Form 4868 is filed correctly, the filing individual does not have to worry about seeking extension permission further from the IRS.
State Taxes May Have Separate Deadlines: Every state has its own set of rules when it comes to filing extensions on a federal basis. Double-check with other state tax custodians to make sure there are no set other extensions.
Corporations and Businesses: Owners of corporations or businesses seeking an extension are required to complete Form 7004. The procedures for businesses are, however, akin to those for individual taxpayers, albeit with different requirements and forms.
Extensions for Military and Overseas Filers: Servicemen and U.S. citizens residing outside the country are automatically eligible for extensions. These individuals still need to complete Form 4868. U.S. citizens working overseas generally get an additional two-month extension apart from the six months which is provided to everyone else.
How EasyFiling Assists with IRS Tax Filing
Filing taxes can be complicated, and it becomes more so if you need to ask for an extension. EasyFiling provides various services that cater to all of your needs. Here are some of the things we do:
Easy Extension Filing: We make sure that all extension requests are filed on time and that the IRS Form 4868 is filled out accurately.
Tax Payment Assistance: Avoid penalties and interest by estimating and paying taxes along with us.
Organizing Documents: We help in the organization of tax documents beforehand so that filing becomes smooth.
Professional Assistance: Get the right answers and guidance with the extension procedure so that you don’t make any mistakes.
Comprehensive Tax Services: From extension filings to tax return preparation, amendments, and more. Filing becomes simple and stress-free.
Conclusion
It is easy to apply for an IRS tax filing extension and it can also give you that extra time you may need to put together your documentation, navigate through your intricate tax matters, or even give you time to calm down before making your tax return.
Remember though that an extension will only extend your time to file and not to remit payment for taxes that you owe. If you expect to owe, ensure that you estimate your liability and submit your payment by the original April 15 deadline. That way you will not have to incur penalties or interest.
Nabin Adhikari
