Why You Need to File a Tax Extension

There are some occasion when, even if you have wanted to pay your taxes on time, you just can’t do it  because you need to pay attention to more pressing matters. Whatever the reasons maybe,  you can delay payment by filing for a tax extension which simply give you more time to file but that doesn’t give you extra time to pay your taxes.

Of course, we all know that April is the deadline to file your taxes.  In fact, the original April 17 deadline was extended to midnight April 18 after the Internal Revenue Service’s official website crashed and left millions of people frustrated. If you still weren’t able to make the new deadline,  you are not alone. Many knew they couldn’t make it: The IRS estimated that it received 11.6 million requests for extensions, including one from President Donald Trump.

But while missing the deadline,  purposely  or  not,  you need to know a few things which TAX LIEN SEMINARS,  has prepared  to assist  you   to avoid some serious penalties.

• The deadline for an extension was April 18 and, if you asked for one, you’ll have until Oct. 15 to file your taxes, the IRS notes.
• An extension to file, however, generally is not an extension to pay. You must have already paid what you owe by the deadline to avoid a late fee.
• If you didn’t file for an extension, however, there are no penalties for filing late if  you’re  owed a refund.  There is no immediate sense of urgency, because  there is no interest or late-payment penalties.

Taxpayers, basically, have  legitimate reasons to file for a tax extension.  Some may need extra time to account for a complicated tax situation due to the sale of a home, a death in the family or income generated from a side hustle . Sometimes, important documents are not available  until late in the season. In other cases, a tax professional may need more time to devote to a complex tax situation.

While it may be personally important to have a good reason to file for an extension,  the IRS doesn’t ask why you’re filing the request.  But the IRS  will deny  if the extension form itself is filed after the April tax deadline,  when extension requests are due.

TERRA INTERNATIONAL REALTY, wants  to remind taxpayers  that your request is for an  extension of time to file, but it is not an extension of time to pay. If you have a balance due on your tax return and you don’t pay  on the due date, IRS and state taxing authorities will compute late payment penalties and interest from the original due date of the tax return through the date you have paid the balance in full.

Remember also that failure-to-pay penalty, which is 0.5% per month is much lower than failure-to-file penalty, which is 5% per month.  So it is necessary to pay before the April Tax deadline.

The form is free, but you might pay a preparer for help. Taxpayers can e-file their request through Free File or file a paper Form 4868 for free, according to the IRS. Filers can also get an extension by making estimated tax payments through the IRS’s Direct Pay system, Electronic Federal Tax Payment System or credit card or debit card payment portal, and noting that the payment is for an extension.

Tax Lien Seminars suggests that you contact  your tax preparer  in early May to restart the tax-preparation process. Early preparation and filing  to know your actual tax  will make things much easier and  possibly  reduce  any  penalty you  may  owe if you underpaid your  tax computations..

Finally, If possible, do not let the morrow takes care of the things you can do today.  While filing for an extension will buy you an extra six months , it shouldn’t be an excuse to delay getting your paperwork together before the new October deadline.

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