Your trusted source for the latest news and insights on Markets, Economy, Companies, Money, and Personal Finance.

When you’re one of many thousands and thousands of People who’ve procrastinated submitting their taxes forward of the April 15 deadline, there’s a method to get some respiratory room: File for an extension. 

The step provides taxpayers till October 15 to file their federal tax returns, and the method is pretty fast — and in addition free. About 90 million folks have filed their 1040s with the IRS as of March 29, the tax company says. However because it expects about 128.7 million tax returns this 12 months, which means nearly 40 million folks have pushed off submitting till the final two weeks of the common tax season.

Virtually half of People delay engaged on their taxes, a brand new survey from tax prep firm TaxAct discovered. Many are careworn by the duty, however greater than 1 in 4 is anxious about owing cash to the IRS, the research discovered.

“Some folks do not need to pay the steadiness due, and say, ‘I am going to let the federal government come after me,'” Mark Jaeger, vp of Tax Operations, at TaxAct, advised CBS MoneyWatch. 

However different taxpayers might have had a significant life occasion, just like the delivery of a kid, that prompted them to place off their taxes, he famous. Generally a person’s tax kinds might be delayed, which then causes the taxpayer to scramble, as soon as the kinds arrive, to get their 1040s filed by April 15. 

The excellent news is that getting an extension “is definitely fairly easy,” Jaeger stated.

How you can request an extension

The IRS will give taxpayers an computerized extension in the event that they file Kind 4868. This one-page doc asks for fundamental info equivalent to your title, handle and Social Safety quantity. 

There’s one other method to request an extension that is even simpler, Jaeger stated. 

“The only manner is to undergo a do-it-yourself tax software program or go to the IRS web site and make a fee,” he stated. “Just by making a fee, you might be submitting an extension.”

Certainly, the IRS says it robotically counts funds made by the April 15 deadline as an extension, and by taking that step, you will not even must file a separate Kind 4868. 

You may make a fee through the IRS’ Direct Pay, the Digital Federal Tax Cost System or with a credit score or debit card or digital pockets. 

If I get an extension, can I delay paying the IRS? 

Nope. That is as a result of receiving an extension to file is not an extension to pay what you owe the IRS. 

“Taxpayers who owe ought to pay their whole obligation, or as a lot as they will, by the April 15 deadline to keep away from penalties and curiosity,” the IRS stated on Thursday.

Understanding how a lot to pay the IRS might be tough for individuals who have not but filed their taxes, however Jaeger recommends your federal tax fee within the prior 12 months. When you paid, for instance, $5,000 within the prior tax 12 months, however have solely paid $4,000 within the 2023 tax 12 months, you must ship the IRS a fee for the $1,000 distinction, he famous.

What’s the penalty for failing to pay?

The IRS fees a penalty should you do not pay what you owe the federal government, the quantity if which is predicated on the share of the taxes you did not pay. 

For example, should you file an extension and owe the IRS however do not pay by April 15, you will face the penalty. The IRS fees 0.5% of the unpaid taxes for every month, with a cap of 25% of the unpaid taxes. 

What’s the high-quality for failing to file?

The IRS additionally levies a high-quality should you do not file or ask for an extension by April 15.

The failure-to-file penalty is 5% of unpaid taxes for every month or a part of the month that the tax return is late. The high-quality is capped at 25% of your unpaid taxes. 

Individuals who each neglect to file and fail to pay what they owe will not must pay each fines, nevertheless. The IRS stated it reduces the failure-to-file penalty by the quantity of the failure-to-pay penalty for that month, in order that the taxpayer will face a mixed whole penalty of 5% for every month their return is late. 

What if I can not pay what I owe the IRS?

The IRS will arrange a fee plan with taxpayers who cannot afford to pay the complete quantity they owe the tax company. 

Share this article
Shareable URL
Prev Post
Next Post
Leave a Reply

Your email address will not be published. Required fields are marked *

Read next
Federal regulators on Tuesday enacted a nationwide ban on new noncompete agreements, which maintain hundreds of…
ByteDance, the China-based proprietor of TikTok, mentioned it does not have plans to promote the social media…
Meta is attempting out new instruments on its Instagram platform to fight the sexual extortion of teenagers,…
Elon Musk sues OpenAI 04:52 Elon Musk is suing OpenAI and CEO Sam Altman, with the Tesla founder alleging they…