When it gets down to crunch time in April and your tax return is due, you might realize that you’re not going to be able to get your taxes filed on time. The good news is that you can easily file an extension, giving you an extra 6 months to file your taxes.
About 10 million taxpayers file for an extension each year. And no, not everyone who files for a tax extension is a procrastinator. Some people have complex tax situations that take a bit more time to sort out. Others may not receive the forms and information they need in order to do their taxes by the April deadline. And some people are just flat out too busy to get their taxes in on time.
The good news is that it’s usually quite simple to get approved for a tax extension, and you also don’t have to provide a reason for filing your extension. So, even if you are simply a procrastinator, that’s okay.
Of course, if you’ve never filed a tax extension before, you probably have a little to learn about how it works. Here are some key things to keep in mind:
- You get 6 more months to complete your tax return—If you file for a tax extension, that will give you another 6 months to finish up your return. So, instead of having to complete your return by April 15, you will have until October to get it finished up. This can be very helpful if you’re still waiting on certain tax documents or if you just need some more time to get all your tax information organized and sorted out.
- You still have to pay your taxes by the April deadline—A tax extension is only an extension of the time to file your actual tax return. It is not an extension of the time you get to pay your taxes. If you owe at tax time, you need to make a payment by the April due date. Otherwise, you will have to pay a late penalty on the amount owed. The interest on unpaid taxes can really start to add up quickly, so make sure you send a payment of the amount you expect to owe when you file your tax extension.
- You will have to wait for your refund—Have money coming back to you? Great! Unfortunately, you won’t be able to get a tax refund until you’ve filed your return. So if you file a tax extension, that means you won’t be receiving your refund until you’re able to file your tax return. If you’re counting on getting that money early in the year like normal, then you need to file your taxes on time. Otherwise, be prepared to wait.
- You will avoid the late-filing penalty—While you will still be penalized if you don’t pay the taxes you owe on time, you will not receive a late-filing penalty if you file your extension in time. Those who don’t file their returns or file for an extension by April 15 are regularly penalized 5 percent of the tax they owe for every month they are late. So, make sure you file for your extension on time so you don’t get hit with the late-filing penalty. And once you get your extension, make sure you file by October.
- You can take time to get your return filed accurately—A lot of times, people wait until the last minute in April to prepare and file their returns. As a result, they end up rushing through the return. Mistakes are made, deductions are overlooked, and the end result isn’t what it could be. By filing a tax extension, you can take the time to make sure your return is completed accurately.
- Filing an extension is simple—It’s really quick and easy to file an extension, and it doesn’t matter what your reason is, what tax form you’ll be filing (1040EZ, 1040A, or 1040), or what your status is. You don’t even have to pay a fee for the extension. Just fill out one simple form and that’s it.
If you just can’t get your taxes done on time in April, your best move is probably to file an extension. Of course, just because you get an extension doesn’t mean you should procrastinate. Don’t wait around until October to file. Get your taxes done as soon as you’re able to so you can get it over with and stop stressing about it.
Jimmy Buckowski is a tax advisor that specilizes in IRS tax problems for boht individuals and businesses. When he is not helping people with their taxes his hobbies include fishing, boating and camping.