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Need More Time to File Your Taxes? Here's How to File an Extension

Need More Time to File Your Taxes? Here's How to File an Extension

Anyone can file a tax extension. If you've been out of town, faced an emergency, or just don't have the right documents, you may need more time to file your tax return. Even if your reasoning doesn't matter, an extension gives you more time — an extra six months — to file your tax return. But before asking for an extension, make sure you know the rules.


What is a tax extension?

A tax extension gives you until October 15 to file your tax return. A tax extension gives you more time to file, but not an extension if you owe money to the IRS.

Most people think if they owe the IRS; it will take a few extra months for them to make the payment when it's not. You can calculate the amount you owe and send the payment with the tax extension form.

Note: You still have more time, usually until June 15, to file your tax return and pay any taxes due without asking for an extension if you are a US citizen or resident alien residing outside the United States and Puerto Rico and your principal place of business (or work station if you are in the military) are outside of the United States and Puerto Rico. If you need more time, you can request another four-month extension.

If you owe money, you must make a payment by the filing deadline, which is April 18, 2022, and April 19 for residents of Maine and Massachusetts, to avoid penalties and interest. However, if you cannot pay the full balance owing, we still recommend that you file your tax return to avoid losing the penalty. You can request an installment arrangement with the IRS online or file Form 9465. The penalty for nonpayment is reduced when you have an IRS-approved payment plan.


Is my IRA contribution period extended?

Contributions to traditional IRAs and Roths from the previous year must be paid before the tax return expires, whether or not an extension is requested. However, if you are a sole proprietorship, the deadline for contributing to a SEP or SIMPLE IRA is extended with your tax return if you file an extension.


How much does it cost to file a tax extension?

It's free to file a tax extension whichever way best suits your needs - electronically or by mail. But not filing for an extension and filing taxes by April 18 can be costly.

A tax extension is not a payment extension regardless of the amount owed. To avoid a fine, you must have paid at least 90% of the current year's tax or 100% of the previous year's tax, whichever is less.

For couples filing an adjusted gross income of $150,000 or more together, the withholding must be at least 110% of the total tax owed the previous year ($75,000 if filed separately). You can usually avoid a fine if you owe less than $1,000. Special rules apply to certain people, such as farmers, fishermen, and domestic employers.


How to file a tax return extension

If you file electronically, you will not need to complete any additional documents. The IRS automatically processes an extension when you pay all or part of the estimated income tax online or by phone.

Alternatively, you can file an extension by filling out Form 4868. You can use the IRS electronic file or fill out a paper form and mail it.

On the form, you'll answer a few personal questions, such as your address, social security number, and an estimate of tax payable. If you are applying with your spouse, you will also need their Social Security number. For non-residents, an Individual Tax Identification Number (ITIN) is required. If you don't have one, you can apply to the IRS for one.

If you know you owe money, you can pay a portion of your total estimated tax debt. 

If you owe the IRS, you can send a payment. If you can't afford to make a payment, still go ahead and file the tax return because the penalty for not filing is severe.


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Pat Raskob
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