If you haven’t filed your tax return yet, don’t worry there’s still time. But not much! In the event you need more time than the April 15th deadline will allow, you can always file for an extension.
We break down last-minute tax tips for individuals and households who need more time during tax season.
Last-Minute Tax Help
No matter how we try to stay on top of things and get organized, for many individuals and businesses alike there just aren’t enough hours in the day. Thankfully, the IRS allows you to file Form 4868 requesting a 6-month extension past the tax return due date. This means you’ll have until October 15, 2015 to file your 2014 tax return.
The process is relatively quick and painless, but be sure to read through all the details so you don’t end up paying excessive penalties and fees.
How to Correctly File a Tax Extension
Head over to the IRS website to view and print Form 4868. Then choose one of the methods below to request an automatic tax extension.
Hire a professional. The ins-and-outs of taxes can be a bit complicated, so if you’re unsure of about the details don’t be afraid to hire a professional, or CPA ,that offers secure IRS extension e-files. You’ll have a lot more peace of mind knowing it’s filed correctly, which is especially important if you own a small business.
Do it yourself. The form isn’t too complicate and can be easily filled out on your own, if you feel comfortable with tackling it. Here are three ways to file the form yourself.
- File Form 4868 and pay all or part of your estimated tax due, using a credit or debit card through the Electronic Federal Tax Payment System (EFTPS).
- File Form 4868 online for free, by accessing IRS e-file using your home computer or through a tax office that uses e-file.
- Print off and fill out a paper Form 4868 and mail to the IRS directly.
Submit On Time to Avoid Fees
Although you could get more time to file your tax return, you don’t get more time to pay your bill. If you don’t pay all or part of your estimated tax payment by April 15th, you’ll be subject to a late payment fee. The fee is usually ½ of 1% of the taxes not paid by the due date for each month (the maximum fee is 25%).
It’s also important to submit this form by the filing due date or else you’ll have to pay a failure to file penalty. This combined with the late fee could tack on quite a large number to your final tax bill. But you can keep more of your hard-earned money by sending in the extension form on time, with a partial payment.
What if You Can’t Pay Your Taxes?
Filing a tax extension won’t help if you have a large tax bill. If you’ve already started on your taxes and realize you can’t pay your bill, the IRS offers several payment options so you can pay your bill based on your budget needs.
You can request a short extension (about 60 to 120 days) to pay your complete tax bill. However you will still have to pay any penalties and interest that’s assessed, but it will be at a lower rate than if you delay your payment altogether. You can also take advantage of installment agreement where you can pay a set amount per month until your taxes are paid in full.
Finally, by paying your taxes using a credit card or personal loan, you’ll find that the interest rate you’ll pay to the financial institution will be lower than the combined penalties and fees you’ll pay the IRS.
Need more help or explanation? Head over to the IRS website for more information.