Posted by Elliot Kravitz, ATP

What Happens When Your E-file Extension Is Rejected

What Happens When Your E-file Extension Is Rejected

Rejecting tax extension application through e-file or on paper isn’t really something that the IRS would do a lot of times. However, they have rejected tax extension applications for a couple of reasons. In this article, you will learn how to make sure your application passes all these tests and the reasons for rejection of a tax extension. 

Together with their personal tax return, this information is for small business and personal tax returns extension applications for their business using Form 4868.  Form 7004 has automatic extensions for corporate and partnerships. However, the application must still be filed before the deadline and pay taxes due.

1. Learn To File On Time

It can get a little tricky when it comes to knowing when to file your extension. Generally, as soon as your return is due, your extension application is due as well. The problem is can be difficult to know when a tax return specifically a business tax return is due.

In connection with where the due date falls on the calendar, the exact due date for returns changes each year as well. The due date is the next business day if a tax return due date is on a weekend or holiday. For the current tax year, find the list of tax return due dates on the IRS website.

Don’t forget to include the payment for your taxes together with your extension application to avoid paying fines and penalties. You must keep this in mind because there is no extension on payments.

2. Review Your Application for Errors and Report Information Changes

You will be required to file your business taxes as part of your personal tax return if you are reporting your business taxes on Schedule C, or if you’re reporting income from a partnership or LLC. The form you will be using is Form 4868. Even though the process of filing the extension application is fairly easy, you must watch out for some potential pitfalls as well.

  • Your name and address and your tax identification information. The tax ID number on your extension is your personal social security number, not the number for your business so make sure you’re using the correct one. Remember that this application is for your personal tax return. 
  • An estimate of your tax liability. These things must be included in your estimate: (a) personal income, (b) business income, and (c) your self-employment tax liability if applicable. You mayface penalties for underpayment if you failed to correctly estimate taxes.
  • How much you have already paid (in withholding, estimated taxes, or other payments), 
  • The balance due, and, of course,
  • The amount that you’re going to pay. You can pay in another way but the most common way is sending in your payment along with your extension application. Remember that you could face some fines and penalties if you made any payment after the due date. If you pay your balance due electronically, filing Form 4868 is no longer needed. If you pay part or all of your tax electronically, your extension application will be automatically processed by the IRS. 

It’s actually very simple. You just have to make sure you follow the instructions.

3. Reviewing Your Application Before Filing

First, you have to ensure that the application form you’re using for your business type is correct. You have also had to put any changes from business or personal information. The IRS needs to match your tax information to the extension application information so make sure you notify them with any changes using Form 8822.

4. Use the Correct Form

Make sure that the Form 4868 you're using is for the correct year. The first page will show the revision year at the upper right-hand corner. The year of the return and the revision year must match. 

5. Consult a Tax Professional or Use a Tax Software

If you really want to know whether your extension application is accepted or not, you may consider using a tax preparation software or consulting a tax professional. The software allows you to file your extension application online while if you use a tax preparer, they will take care of the filing process for you. If you made a mistake or if you missed something, the software will walk you through the process.

Elliot Kravitz, ATP
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