Sometimes, things beyond your control keep you from making that April 15 income tax filing deadline. Family emergencies. Too much time traveling for work. An overly complicated financial situation. Missing – required – forms from third parties.
Even though tax filing season is 2-1/2 months long, sometimes you’re just not ready. The IRS makes allowances for this by offering a six-month extension period. Here are facts about tax extensions:
- Anyone can file for an extension. If you’re a U.S. taxpayer, you’re eligible to file for what the IRS calls an “automatic” extension. The agency does not require an explanation for your request.
- The IRS still wants you to pay your anticipated tax obligation by April 15. As the agency states on the required form, Although you are not required to make a payment of the tax you estimate as due, Form 4868 does not extend the time to pay taxes.
- The IRS charges interest on late payments made via an extension. You’ll pay interest on any unpaid tax amount until you pay in full so there is no advantage to paying the IRS later.
- The IRS will assess a late payment penalty for every month or part of a month past April 15 that total tax remains unpaid. Generally, the charge runs one-half to one percent of your taxes due (except for any estimated tax you paid). Max is 25 percent.
- You can ask that the late payment penalty be waived because of your circumstances. If you think that you have a good reason for the penalty to be excused, attach a written explanation to your 1040 when you submit it. In order to be considered for penalty forgiveness, the IRS requires that you’ve paid at least 90 percent of your tax liability prior to April 15th.
- You may also be given a penalty for filing late. Late filing penalties are usually charged when a return is filed after the due date (including extensions). The IRS normally calculates it as 5 percent of the amount owed for every full or partial month. Max is 25 percent.
If your taxes are not done by now, the prudent thing to do is go onto extension so adequate time and consideration goes into your tax filings. An estimate of your total tax liability will need to be created and then extensions forms submitted along with payment.
If you’d like Canner Brody and Yan CPA’s to place you onto extension,just call us. You do not need to be a long standing client of ours. Yes, new clients are welcome for tax extensions.
Simply call us at 305-728-5109 or 305-231-2150 and ask for Andrew Brody, CPA JD. We have been serving the South Florida market for over 65 years and have offices on Brickell Avenue, Miami Lakes and Weston.