Filing your taxes late can invite penalty from the IRS. However, there are ways to reduce the penalty. Let’s find out.
As we all know, federal income taxes have to be filed before April 15th every year. But in some cases, you may not be able to keep the deadline. You might assume that you have to deal with harsh consequences; but that is not the case at all. All that you have to do is to take some simple steps prior to the deadline so that the IRS (Internal Revenue Service) will understand that you have started the process. That means doing nothing about the due date will be problematic. I would suggest you to contact IRS if you are going to delay filing the papers.
Request a filing extension
- In case if you are unable to file it by April 15th, you can obtain a four-month extension if you want.
- Studies have revealed that close to six million people apply for an extension every year.
- If you want to file an extension, fill out Form 4868. This will extend your time to file a Tax Return.
- However, you have to file for an extension before the deadline, which is April 15th.
- Once you apply for an extension, you will get a new deadline of August 15th.
In case if you need a second extension, you need to fill out Form 2688. The thing is that you have to submit this form before August 15th. You have to remember that probable reason for the extension is must. Once you get an extension, you will have time until October 15th to file the tax returns. However, you need to understand that, you have to pay the amount by April 15th when you file for an extension. At least 90% of the amount has to be sent with the extension request if you don’t want them to come after you with penalties. Otherwise, you will have to deal with the penalties attached to it. If you have more questions regarding Income Tax Filing In The US, Take A Look At This Article Here.
Extension is not sought, what will happen next?
In case if you don’t seek an extension by April 15th, you will be subjected to penalty from the IRS. You will be required to pay 5% every month (not to exceed 25%). This interest amount will be based on the money you owe the IRS.
What if I don’t pay?
There can be scenarios where you are unable to pay back the amount due to various reasons. In case if you are not able to pay the full amount, try to send as much money as possible. Well, you have to deal with penalties in both cases but you have to remember that harsher penalty is meant for the case of not filing an extension at all. Not paying after filing also can be worthy of penalty, but it’s not going to be as bad as you think. You will be subjected to a 25% penalty if you choose to not file an extension at all. It is very important to pay your taxes on time. Otherwise, you will get into all sorts of unwanted scenarios. You have to always remember the due date and plan accordingly. In case if you can’t file it by April 15th, you have to file an extension.