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Tax day is traditionally the day of reckoning for taxpayers. But instead of filing their returns, millions of Americans will request an extension. There are right and wrong reasons to get an extension—and the wrong reasons can cost you.
Who Should Request an Extension?
Technically, anyone can receive an automatic six-month extension. What most people miss is that the extension gives you more time to file, not more time to pay. When you request an extension, you must estimate your tax liability (if any) and send payment with your request. If you don’t, interest and late penalties will add up until the bill is paid.
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When Is It Okay to File an Extension?
Only file an extension if you can’t complete your returns because you don’t have all the documentation you need or your spouse is unavailable or unable to sign your return by the deadline. Procrastination or the inability to get your act together in time is not a valid reason.
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If you are out of the country or in the military serving in a combat zone, you get an automatic extension without requesting it. Talk to one of our Tax Endorsed Local Providers for more information.
How Do I File an Extension?
You’ll need to fill out IRS Form 4868 and file it electronically using IRS e-file. Or, to get an extension without the form, you can pay all or part of your estimated income taxes online or by phone using your debit card. (The IRS accepts credit cards, but you’re smarter than that!) You can also mail your form. Go to irs.gov to download the form or for details on making a payment. Either option must be completed by the April 15 deadline.
Don’t Wait—Act Now!
If you foresee difficulties getting your taxes together in time, talk with one of Dave's tax ELPs. They can help you make sense of your situation and avoid the hazards of filing an extension.