Great news for taxpayers who haven’t filed their federal income tax returns yet – they can push the deadline to mid-October by applying for an extension. This year, the official deadline is 15 April.
So, people that didn’t do the filing yet out of pure procrastination should hurry up, but if you are still missing vital information experts recommend you should go for an extension.
For example, people that are waiting for a Schedule K-1, which they usually receive late (mostly in summer) may find the extension handy. Also, others may miss a tax form such as Form 1099.
John Petosa, an accounting practice expert and professor at the Joseph I. Lubin School of Accounting at Syracuse University, said that in those cases you should go for an automatic extension since the IRS will match the filings with personal returns and if they don’t match up, they will contact you.
Prof. Petosa also suggests that you shouldn’t be hasty, start filing and deliver the IRS erroneous information. You better apply for an extension and take your time to file your return.
“So rather than guess, file an extension,”
The deadline for filing for an extension is April 15. All taxpayers who will comply with it will automatically receive a grace period of six months to file their returns, that is until October 15. Moreover, the IRS doesn’t ask you to provide a reason for doing it.
But the extension has a downside – you won’t see any refunds until you file your tax returns.
Additionally, if a taxpayer owes money to the government, the extension won’t grant them more time to pay their tax bill. People facing this problem should do their best to pay what they owe by April 15.
But if you are waiting for a refund, the agency will not penalize you for late-filing since penalties are based on the tax due. Nevertheless, state returns may be an exception.
Procrastinators who wait to file their returns until the last minute will find it very hard to have their questions answered in due time since the IRS’ staff was trimmed down recently because of budget adjustments. So, you should prepare to wait long before you get your answer.
The IRS commissioner recently acknowledged that about 60 percent of taxpayers who call the agency for help do not get their problem solved in time.
So, if you made up your mind on filing for an extension you should file and submit to the IRS Form 4868 by April 15. You can either mail it or file it electronically.
However, if you feel discouraged to file your tax returns because you currently cannot afford to pay the taxes you owe, you should nevertheless go for it to lower as much as possible the penalties and interests that may come. You can later talk to the IRS to settle the matter.
Tax experts recommend you should contact them first rather than waiting for them to contact you.
Moreover, if your total balance is less than $50,000 you can always apply for an installment agreement that would grant you the possibility of paying the tax bill at a slower pace. Still, you should expect to pay some fees when using an installment plan.
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