Tax season can be a stressful time for many people. There’s a lot to remember and do, and it can be easy to feel overwhelmed. If you find yourself running out of time to file your taxes, you may be wondering if you can get an extension. The answer is yes, you can!
In this blog post, we will discuss the requirements for filing a personal tax return extension, why someone may want to file one, and how to file the extension. We will also discuss what the extension means, what the penalties are for not paying the taxes at the time of extension, how the penalties and interest are calculated, and how Shah Tax & Accounting Services LLC can help file the extension along with the final return as well.
Requirements for Filing a Personal Tax Return Extension
To file a personal tax return extension, you must meet the following requirements:
- You must be a U.S. citizen or resident alien
- You must have filed your federal income tax return for the previous year
- You must have paid all of the taxes that you owed for the previous year
- You must have a valid reason for requesting an extension
Reasons for Filing a Personal Tax Return Extension
There are many reasons why someone may want to file a personal tax return extension. Some common reasons include:
- You are waiting for additional information from your employer or other sources
- You have been affected by a natural disaster or other unforeseen event
- You are experiencing financial hardship
- You are simply too busy to file your taxes on time
- You forgot about the tax deadline
How to File a Personal Tax Return Extension
There are two ways to file a personal tax return extension:
- You can file Form 4868 electronically
- You can mail Form 4968 to the IRS
If you file Form 4868 electronically, you will receive an electronic acknowledgment once you complete the transaction. Keep this acknowledgment with your records.
If you mail Form 4868 to the IRS, be sure to mail it by the due date for filing your taxes. The due date is typically April 15th, but it may be different if you live in a state with a different tax deadline.
What the Extension Means
When you file a personal tax return extension, you are essentially asking the IRS for more time to file your taxes. The IRS will typically grant you an automatic six-month extension. This means that you will have until October 15th to file your taxes.
However, it is important to note that the extension does not give you more time to pay your taxes. If you owe taxes, you must still pay them by the original due date. If you do not pay your taxes on time, you may be subject to penalties and interest.
Penalties for Not Paying Taxes at the Time of Extensions
The penalties for not paying taxes at the time of extension are as follows:
- Failure-to-file penalty: This penalty is 5% of the amount of taxes owed for each month or part of a month that your return is late, up to a maximum of 25%.
- Failure-to-pay penalty: This penalty is 0.5% of the amount of taxes owed for each month or part of a month that your taxes are unpaid, up to a maximum of 25%.
- Interest: The IRS charges interest on unpaid taxes at the federal short-term rate plus 3 percentage points.
How Shah Tax & Accounting Services LLC Can Help
The deadline to file personal taxes this year is April 18, 2023, which is right around the corner and can feel overwhelming if you have not had the opportunity to begin the process. At Shah Tax & Accounting Services, we can work with you to file an extension or conduct an assessment to see if timely filing is still an option for you, thus avoiding penalties and fees. Reach out to us today, we are here to help.