Tax Extension Mistakes to Avoid
When it comes to requesting a tax extension from the IRS, you don’t have to worry about much. They will grant your request, without questions, as long as you follow the proper procedure. Despite the fact that obtaining a tax extension is so simple, many taxpayers make mistakes every year. Below are several tax extension mistakes that you can avoid:
1. Thinking that a tax extension gives you the right to pay later as well. With an extension you are being granted six more months to file your tax return. This does not mean that you also have more time to pay any tax you owe. You must still remit payment to the IRS by the original due date on your return (generally April 15th). If you do not send payment to the IRS, they will begin to charge you both penalties and interest.
2. Believing that you don’t have to do anything in order to get a tax extension. While the IRS is almost always guaranteed to grant you more time to file, they do require that you take some steps to begin the process and let them know. Most notably, you need to complete Tax Form 4868 (Application for Automatic Extension of Time to File U.S. Individual Income Tax Return). On this form, you must provide information about yourself and submit it with payment for any taxes that you owe.
3. Filing for a tax extension when you are due a refund. Did you know that if you are owed a tax refund you don’t have to file for an extension? The IRS will automatically grant extensions to taxpayers who do not owe any taxes. Thus, filing Form 4868 would be a waste of time.
4. Assuming that you can get more than six months. Some people think that they can file for an initial six-month extension and then add extra time to their extension in the future ? this is very rarely the case. The IRS may grant two additional months in particular situations, but this is usually only done for taxpayers who are out of the country or on active duty military service. A six-month extension shifts your filing deadline to October 15th (of that same year), which should give you plenty of time to complete and file your return.
The tax extension process is relatively straight forward and easy to follow. That being said, many taxpayers have gotten confused and made the above errors. As long as you avoid these common mistakes, you should be able to receive a tax extension without any problems.