- 1 Need More Time to File Your Tax Return? Here Is How To File For An Extension
- 2 How to File for an Extension for Your Small Business Tax Return
- 3 how to request an extension for taxes
- 4 How to File for an IRS Tax Extension Electronically or With Form 4868
Need More Time to File Your Tax Return? Here Is How To File For An Extension
For many people, meeting the IRS’s April 18 th tax return deadline for filing and paying the 2010 taxes will prove impossible. Unfortunately, the IRS did not automatically extend the deadline because of the tax filing delay!
Fortunately, the IRS allows taxpayers to file for an extension of the deadline to October 17 th . The process for requesting an extension is fairly easy, however, there are a few things that you must consider regarding this option.
Filing for an extension gives you an additional six months to submit your tax return. For tax year 2010, that means that your tax filing deadline would be extended from April 18, 2011 to October 17, 2011.
An extension allows you to submit your tax return after April 18 th , but it does not extend the amount of time you have to make a payment. This means that you will owe interest on any amount not paid by the original April 18th deadline, plus a late payment penalty if you have not paid at least 90 percent of your total tax by that date. In order to avoid all interest and penalties, you must pay the full amount due by April 18 th .
In order to request an extension, you must file Form 4868 (PDF) with the IRS before April 18 th . You can electronically submit Form 4868 through IRS Free File. Using this service to prepare and electronically submit Form 4868 is free to everyone, regardless of income.
Actually, since I offer professional tax preparation services, I can also electronically submit Form 4868 for you – just use the contact form on the linked page.
Since extending your filing deadline doesn’t push back the deadline for payment, what can you do if you can’t pay the full balance by April 18 th ? Here is what the IRS recommends:
If your return is completed but you are unable to pay the full amount of tax due, do not request to extend your filing deadline. Submit your tax return on time and pay as much as you can. The IRS will send you a bill or notice for the balance due. To apply online for a payment agreement, go to IRS.gov and click “Online Payment Agreement Application” at the left side of the home page under Online Services. If you are unable to make payments, call the IRS at 800-829-1040 to discuss your options.
If I Still Have To Pay By April 18 th , What Is The Benefit Of Filing For An Extension?
By filing to extend your deadline, you are able to avoid the failure-to-file penalty. This penalty is usually larger than the failure-to-pay penalty, so by filing to extend your deadline, you are able to avoid paying the larger penalty.
Also, if you are able to pay at least 90% of your tax liability (remember that for a large amount of taxpayers, your withholdings may cover this amount already) by April 18th, and request to extend the deadline, you will be able to avoid paying penalties, as the IRS explains:
- The penalty for filing late is usually 5 percent of the unpaid taxes for each month or part of a month that a return is late. This penalty will not exceed 25 percent of your unpaid taxes.
- You will have to pay a failure-to-pay penalty of ½ of 1 percent of your unpaid taxes for each month or part of a month after the due date that the taxes are not paid. This penalty can be as much as 25 percent of your unpaid taxes.
- If you filed an extension and you paid at least 90 percent of your actual tax liability by the due date, you will not be faced with a failure-to-pay penalty if you file by the extended due date and pay the remaining balance with your return.
- You will not have to pay a failure-to-file or failure-to-pay penalty if you can show that you failed to file or pay on time because of reasonable cause and not because of willful neglect.
So the bottom line is that if you have already completed your return and you know that you can’t pay the entire balance, it is better to just submit your tax return, pay what you can, and set up a payment plan with the IRS.
You should only request to extend your deadline if you are unable to complete your tax return by April 18th!
How to File for an Extension for Your Small Business Tax Return
The Internal Revenue Service (IRS) has made filing an extension for your small business tax return easier. In the past, you needed to request a three month extension first for an unincorporated business. You would have to keep filing an extension to get more time. Now, you only need to fill out Form 7004, which replaces three other forms: 2758, 8736 and 8800. Those forms are now obsolete. A corporation and an unincorporated business can request an automatic six-month extension. Here's how:
Determine Tax Filing Strategy
How you file all your taxes will determine how you file an extension for your small business tax return. If you plan to use your favorite online or CD-Rom tax software program, it will include Form 7004. The software will ask you questions and guide you step by step to complete the form. If you use a business tax service or a small business tax account, the tax preparer will fill out the form for you. If you plan to do your own taxes without using a tax preparation software, you'll have to fill out Form 7004 yourself.
Part I vs. Part II
The IRS instructs small business owners to fill out Part I or Part II, but not both. Part I is a request for an automatic 5-month extension, and it applies to Form 8804, 1041 (for estates and trusts) and 1065. Part II is a request for an automatic 6-month extension and includes the following forms:
There's only one other part that you have fill out after completing Part I or Part II, and that's Part III.
The information required in the last section is straightforward, except for two things: tentative total tax, total payments and credits and balance due. You'll have to figure out your taxes anyway, which is why you might consider using a tax software or tax preparer if doing your own taxes seems too complex. You'll have the pay the balance due, based on what you fill out in Part III. You can pay online at www.irs.gov.
A small business has to file many tax forms. Figure out the due dates for each form that you have to file. Each form has its instructions with the due date for filing included. As soon as you know that you have to file an extension for a particular return, make sure you submit Form 7004 before the due date. You can e-file Form 7004 if you're short of time, and if you want to benefit from an online confirmation from the IRS. It's critical that you don't file Form 7004 late, or you'll expose yourself to audits and other tax problems.
Don't make the mistake of thinking that filing an extension using Form 7004 will somehow delay payments for taxes you owe. You still have to pay taxes on or before the due date.
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how to request an extension for taxes
Posted by Dave Clarke on April 8, 2014 at 2:12 PM
If by now you've come to the realization that you're just not going to be able to get your tax federal return filed on time, here's some insight into how to file for a federal tax return extension. (As a reminder, your accountant or tax prep professional is your best source of knowledge when it comes to this and all tax-related topics. Talk to them!)
You may be surprised at how searchable and useful irs.gov is. When it comes to learning more about how to file for a tax return extension, the website has information for individuals as well as "corporations, partnerships, REMICs, and certain trusts." You'll also be able to find the requisite forms you need. The "Extensions" section of irs.gov also hammers home an extremely important piece of information: "Please be aware that an extension of time to file your return does not grant you any extension of time to pay your tax liability." Basically that means that even though you're requesting to take some extra time to get the paperwork done, you still have to pay on time.
If you're seeking for an automatic extension to file your federal individual income tax return, you get six (6) months. It's also important to note that in order to get a filing extension for your federal individual income tax return, you need to supply the following information:
- "Properly estimate your 2013 tax liability using the information available to you,
- Enter your total tax liability on line 4 of Form 4868, and
- File Form 4868 by the regular due date of your return"
And for your business filing extension request, Form 7004 is what you need. For this form, you'll need to know what the form for which you're requesting an extension. For example, if you need an extension to file form 1120, you'll need to indicate such on form 7004. (Isn't this fun. )
BONUS TIP: The IRS will not notify you if your extension has been granted; only if it has been declined.
How to File for an IRS Tax Extension Electronically or With Form 4868
My best friend is chronically late for everything: dinner, work, parties, you name it. Unfortunately, this behavior can have dire consequences when tax season rolls around. Several years ago she was in a panic because it was April 15th, the tax filing deadline that year, and she had yet to file her taxes. She rushed through the paperwork and drove to the post office to drop them off in the mail slot at 11:58pm.
What she didn’t know is that the IRS allows you to apply for a six-month extension on filing your tax return. So, if you don’t have it all together by tax day in April, you don’t have to panic, especially if you’re expecting a refund.
However, if you think you owe the IRS money, the extension doesn’t cover that. The IRS still expects you to pay on time, even if you don’t file your return. If you’re in that situation, file the extension and send in what you think you’ll owe to minimize late payment penalties.
Anyone can apply for an extension, and best of all, the IRS doesn’t ask why. You can inform the IRS if you are living outside of the country, but otherwise, it’s only interested in getting an estimate of the taxes you owe. If you are married filing jointly, you must supply your spouse’s Social Security number as well as your own when you apply for the extension. The IRS only contacts you if your request is denied – otherwise you can assume it was accepted.
Unfortunately, an IRS tax extension only applies to the tax paperwork, not payments. If you owe money, it is still due on the original due date. You must at least pay an estimated amount of your total tax liability.
You have three basic options: You can file electronically, by mail, or you can simply send the IRS the amount you think you owe them.
Keep in mind that the IRS is very slow to process paperwork, but very quick about processing payments – they’ll quickly notice if you fail to pay them.
If your income is below $62,000, you can use a tax software provider through the IRS Free File website – filing an extension is free using this system. If your income is greater than $62,000, you can submit Form 4868 electronically using IRS Free Fillable Forms. You can also use an accountant or reliable tax preparation software program – just keep in mind, there’s no reason to pay a lot of money to file this simple form.
You can also mail in the request form (Form 4868: Application for Automatic Extension of Time To File U.S. Individual Income Tax Return). Make sure you completely fill out the form – if it is rejected, you may be liable for penalties. You need to include a check or money order or pay online if you have tax due.
You can also simply pay the amount that you think you owe, and send in the actual return later. The IRS accepts credit and debit cards, as well as electronic transfers directly from your bank account. If you send the IRS the appropriate estimated amount of money, it will grant you an automatic extension.
If you’re faced with paying the gift tax this year, you can request an extension by filing Form 709 (the form required for paying the gift tax) and paying that tax, without extending the deadline on the rest of your tax return. However, if you need extra time for that too, Form 8892 extends your time to file Form 709.
If you’re going to be late with other returns, such as estate- or trust-related returns, corporate- or business-related returns, or information returns, review Form 7004 (and talk to your CPA) to see if you can request an automatic five- or six-month extension on filing those forms. As with a regular tax return, you need to send in the amount you estimate you owe at the time you file for an extension.
Remember, you won’t get a break on having to pay your tax bill by filing an extension. If you simply don’t have the money, you should contact the IRS about setting up an IRS tax payment plan. In most cases, you will be automatically approved and be able to pay on a monthly basis. It’s not worth it to find out what happens if you don’t pay your taxes. You should only file an extension if you need the time to get your return together, or are waiting for some of your documents to be finalized.
Are you considering filing for an IRS tax extension?