Which Tax Extension Form Should You Use?
IRS Form 4868
Tax Form 4868, provided by the IRS, is officially known as the Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. This form needs to be filled out and submitted to the IRS if you cannot file your Federal personal income tax return by the original due date (usually April 15). Filing Form 4868 will gives you a 6-month extension on that deadline. However, make sure that you file the tax extension request with the IRS by the original filing deadline of April 15th.
This tax form provides an extension to all taxpayers who are filing personal income tax returns with the IRS. This includes individual taxpayers, independent contractors, sole proprietors, and single-member LLCs (limited liability companies). By using IRS Form 4868, you can extend the filing deadline for Tax Form 1040, 1040A, 1040EZ, 1040NR, 1040NR-EZ, 1040-SS, and 1040-PR.
It is important to note that the extension will only give you more time to file your return, and you still have to pay your taxes by the original due date (April 15). You will be required to provide an estimated amount of your owed taxes on your tax extension form. You have the option to pay all, some, or none of this tax amount when you submit your extension application. However, you may have to pay interest and late fees on any outstanding amount after the due date has passed.
Other Tax Extension Forms
• Tax Form 7004 (Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns)
• Tax Form 5558 (Application for Extension of Time to File Certain Employee Plan Returns)
• Tax Form 8892 (Application for Automation for Extension of Time to File Tax Form 709 and/or Payment of Gift or Generation-Skipping Transfer Tax)
• Tax Form 4768 (Application for Extension of Time to File a Return and/or Pay U. S. Estate and Generation-Skipping Transfer Taxes)
• Tax Form 8809 (Application for Extension of Time to File Information Returns)
• Tax Form 2350 (Application for Automatic Extension of Time to File U. S. Income Tax Return: For U.S. Citizens and Resident Aliens Abroad Who Expect to Qualify for Special Tax Treatment)
• Tax Form 8868 (Application for Extension of Time to File Exempt Organization Return)
• Tax Form 1138 (Extension of Time for Payment of Taxes by a Corporation Expecting a Net Operating Loss Carryback)
If you need a tax extension for filing your return, make sure that you fill out the right form accurately and submit it by the proper due date.
Deadlines and Due Dates for Personal Tax Extensions
If you cannot file your Federal income tax return by April 15 (following the tax year you’re filing for), you may be subjected to IRS penalties unless you get a tax extension. But you should know that it’s extremely easy to file a tax extension request with the IRS and get additional time to file your tax return. To request this type of extension, you will be required to complete and submit Tax Form 4868 to the IRS by April 15th at the latest.
The personal tax extension form (known as the “Application for Automatic Extension of Time to File U.S. Individual Income Tax Return”) allows you to get an extension of 6 months to prepare and file your taxes. This means that your tax-filing deadline would be extended to October 15 of the same year. Note that slightly different rules apply to U.S. taxpayers living abroad.
If you fail to file your tax return on time and you don’t get an extension and you owe money to the IRS, you will accrue interest and penalties on your entire outstanding tax payment. But if you submit Tax Form 4868 and get an extension, you will at least avoid the late filing penalty.
To avoid the IRS late payment penalty, you should pay at least 90% of your estimated tax liability by the original deadline (April 15). If the amount you’ve estimated (and paid) turns out to be higher than your actual tax liability for the year, you can file for a tax refund. Conversely, if the estimated amount that you’ve paid is less than your actual tax liability, you will have to pay the remaining amount by the extended due date.
There are several ways of estimating your tax liability so that you can pay on time and avoid incurring interest. If you are self-employed, and your income and expenses are similar to last year, you can probably assume that you will owe the same tax amount as you did last year. If you are a salaried employee, you should review your W-2 forms to determine what taxes your employer has already sent to the IRS on your behalf. Then, consider if there have been any significant changes in your income, expenses, and dependents as compared to the previous year. By doing so, you can get a close estimate of your tax liability for the current year.
Basically, there are 2 types of late fees that the IRS will charge if you owe tax and don’t file on time:
• Late Filing Penalty — Applies to your outstanding balance at 5% per month, up to a maximum of 5 months
• Late Payment Penalty — Applies to your outstanding balance at 0.5% per month, up to a maximum of 25%
In addition to these penalties, the IRS will charge you interest on any unpaid tax balance. Interest is compounded daily and is determined on a quarterly basis. The interest rate is the Federal short-term rate plus 3%.
Getting Additional Tax Extensions
By filing IRS Tax Form 4868, you can get an automatic personal extension of 6 months to file your taxes, starting from April 15. Once your tax extension is IRS-approved, the due date for filing your income tax return will be moved to October 15. Note that the IRS does not grant any other second or additional tax extensions beyond 6 months, except in a few specific situations.
Second Tax Extensions for Overseas Taxpayers
Individuals who are living outside the U.S. and Puerto Rico at the time their tax return is due can qualify for an automatic 2-month extension, moving their filing deadline to June 15. To request an additional 4-month tax extension, Form 4868 must be filed by June 15, which will extend the deadline to October 15.
Additional Tax Extensions for Active Duty Military Personnel
An additional extension is provided to members of the U.S. Armed Forces who are on active duty (either in a combat zone or contingency operation area) during their original tax filling deadline. Qualified military members will receive an automatic 180-day extension, which begins on the day after they’ve left the combat zone or contingency operation area. For more information, see IRS Publication 3 (Armed Forces Tax Guide).
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