It can happen to the best of us. You look at the calendar in March and think you have plenty of time to get your taxes in order. Then the super flu hits or a work milestone gets moved up, and next thing you know the tax deadline is next week. Fortunately, you can file for a tax extension that will give you an additional six months to get your tax return in without penalty. This year, the 2018 tax extension deadline is April 17 (the same day regular taxes are due). So, to all the procrastinators out there, here's everything you need to know about requesting an extension, and pushing your tax filing deadline back to October.
When it comes to dreaded Tax Day, the IRS is way more forgiving than you may think about doling out more time. "Tax-filing extensions are available to taxpayers who need more time to finish their returns. Remember, this is an extension of time to file, not an extension of time to pay," explained the IRS website.
It turns out, it's actually a pretty common thing to need more time to get your tax documents in order. Some 10 million people are expected to file for an extension this year, according to Forbes.
To request a tax extension, the IRS advises that you use Free File. "In a matter of minutes, anyone, regardless of income, can use this free service to electronically request an automatic tax-filing extension on Form 4868," explained the IRS.
There are a few other ways you can request an extension, requiring varying degrees of effort. You can file electronically using a fillable form from the IRS, or you can turn to a tax service like Turbo Tax, which will walk you through how to file an extension for free.
Another clever way to request a tax extension is kind of like an ingenious loophole. "If you send in an extension payment using the Direct Pay system, an extension will be filed for you. No forms or mailing or e-filing is necessary," explained The Balance.
Once your extension request is granted, you will have six more months, or until October 15, 2018, to get your taxes filed. "It's always better to file a complete, correct return on extension than a rushed, flawed return by Tax Day," advised Forbes.
One interesting thing to note is that if you're expecting a tax refund, you may not want to waste your time filing for an extension in the first place. "If you have a refund coming from the IRS—as about three out of four taxpayers do every year—then there is no penalty for failing to file your tax return by the deadline, even if you don't ask for an extension," explained Turbo Tax. That's because the penalty for filing your taxes late is a percentage of the total taxes you owe. If you owe nothing, than a percentage of nothing is still nothing.
But even if there's no penalty for filing your taxes late (for those who have a refund coming their way), it does still make sense to file as soon as you can. "The IRS gives you three years from the original filing deadline to submit your return and claim a refund. If you don’t take action before then, Uncle Sam gets to keep your money. If you applied for state and federal extensions and you’re expecting a refund, it doesn’t make sense to delay your filing any longer," explained Smart Asset.
I, for one, will be mighty relieved when tax season is officially over, whether that's in a few days for some, or in October for others!
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