The substantial amount of time and energy spent on filing tax returns is one of the main reasons so many put it off. In addition to procrastination and negligence, in most cases, people do not file their tax returns before April 15, either because they fall into their busy schedules or wait for all the necessary tax documents. Recognizing this unavoidable need for additional time, the IRS allows an extension for a period of 6 months, i.e., this allows you to postpone the filing of tax returns from (what is usually) April 15 to (approximately) October 15. Thus, people who are too busy with their personal or professional obligations can buy some time to collect their tax documents and carefully analyze them prior to submitting their return. In this article, we will limit ourselves to what needs to be done in five simple steps to learn better how to file a 2018 Tax year extension.
- Before you decide if you want to file a tax extension, it is reasonable to understand the process. IRS tax law allows you to postpone the filing of tax returns for six months but does not give the same for tax payments. If you have to pay taxes to the government, then you must pay it before or until April 15 (or thereabouts, depending upon if that falls on a weekend). Therefore, this will not be a sensible step if you apply for an extension, hoping that you will be able to defer payments.
- Secondly, if the 2018 Tax year extension gives you until October 15th to submit your return. If you do not, you may be subject to a fine for late registration, which will be 5 percent of unpaid taxes to a maximum of 25 percent. Also, if you can not pay the amount of income tax required, the penalty for non-payment is added to the penalty for failure. As a rule, the penalty for failure can be more than the penalty for non-payment.
- So, no matter how busy you are, you must at least file a tax extension prior to April 15th to avoid fines. The first thing to do in this respect is to obtain the 4868 form if you apply as an individual, and form 7004 if you are a business entity. These forms can be accessed on the Internet, either on the IRS website or in free Web sites that provide electronic files. Your name, contact details, and social security number are among the fields that you will need to complete on the application. Online services such as ours will allow you to submit this form electronically, for a small fee.
- Remember to avoid making mistakes or providing incorrect information, as this may result in your extension request being denied. The IRS usually approves the extension, regardless of the reason. One of the advantages of e-filing is that you can track the status of your application, and receive a confirmation electronically after receiving approval.
- Finally, with the time provided, collect all the necessary documents, conduct an in-depth analysis of your tax situation, and be sure that all your submissions are accurate so that you can maximize your deductions and refund (if due).
These are five simple points that you need to know about how to file a tax extension. Read more information on how to file a tax return on the IRS website, and if you are ready with tax returns before April 15th, rethink the idea of extending the deadline, as it may not be required.