With only one day left for April 15 tax deadline, if you need more time to file your papers, you have an option. For this, you can submit a simple, short form to get an automatic extension until October 15. And all you need are basic details like your name, address, Social Security number, and an estimate of taxes owed or refunded.
However, the IRS stresses taxpayers “an extension to file is not an extension to pay taxes.” In case you owe taxes, you need to pay them by April 15 to avoid penalty.
Here are some guideline to follow:
If you don’t owe taxes:
You can use IRS Free File at IRS.gov/freefile to request an automatic six-month tax-filing extension, regardless of income.
Otherwise, you cansubmit Form 4868 to request more time. If mailing it, ensure it’s sent before April 15.Mail may take days to get postmarked and then be considered late by the IRS. In such cases, it is better to visit a post office for a hand-stamped postmark or filing online to avoid missing the deadline.
If you owe taxes:
You can make an electronic payment and select “extension” or Form 4868 as the payment type. The IRS will treat this as an extension request, so filing the form separately isn’t required.
It needs to be noted, disaster victims and some living abroad and military members in combat zones may have extra time to file.
What if I don’t file an extension?
In case you fail to file tax returns by April 15, a penalty will be charged by the IRS. The penalty is 5% of the tax owed each month, or for part of a month, the return is late up to a maximum of 25%. If you’re more than 60 days late, there’s a minimum penalty — either $525 or the full amount of tax you owe, whichever is lower.
If you don’t pay your taxes on time, you’ll face an extra charge. The IRS adds 0.5% per month on the unpaid amount, up to 25%. This can rise to 1% if you still haven’t paid 10 days after the IRS warns it may take action to recover the money.
Apart from that, the IRS also charges interest on unpaid taxes. The rate changes every few months and is based on a federal rate plus 3%. It also compounds daily. Earlier this year, it was around 7%.
There’s no penalty for filing late if you don’t owe any tax or if you’re due a refund. But you should still file soon, because you won’t get your refund until you do.