Methods to File a Tax Extension in 2023

So you bought your W-2 and some different statements in February and thought, Meh, I’ll do my taxes later. Or perhaps you place off doing all your taxes since you have been lacking an essential doc. March flew by, and earlier than you knew it, Tax Day was looming.

If that’s you, you may have to file a tax extension. Unsure what that even means or the way it works? Don’t fear. We’ve bought the total scoop on every part it’s worthwhile to find out about tax extensions.

What Is a Tax Extension?

Merely put, a tax extension offers you six further months to file your taxes. So as an alternative of your tax return being due on Tax Day (normally April 15), it’ll be due October 15. Simply in time for a pumpkin spice latte (if that’s your jam).

However truthful warning: An extension doesn’t purchase you extra time to pay your taxes. For those who owe taxes, they’re due on Tax Day, and in the event you don’t pay by Tax Day, you’ll rack up late-payment penalties (0.5% of your tax invoice a month as much as a max of 25%) and curiosity.¹ Nevertheless, submitting an extension may also help you keep away from huge failure-to-file penalties, that are 5% a month as much as a max of 25%.²

Is It Simple to Apply for a Tax Extension?

The IRS has a well-earned fame for making issues overly difficult. Ever attempt to navigate the IRS web site? It’s a maze of schedules and publications. However submitting a tax extension is fairly doggone straightforward, and most are mechanically accredited.

How Do I File an IRS Tax Extension?

So, all it’s important to do to file an extension is fill out Kind 4868. And severely, the shape simply asks for primary info like your title, handle and Social Safety quantity. You’ll additionally have to estimate your tax legal responsibility, and lookup how a lot in federal taxes you paid (you will discover that in your W-2). You could report this information so you may make a tax fee to the IRS while you file your extension. For those who don’t owe taxes, you don’t need to file an extension. However you’ll be lacking out on a refund.

However look—in the event you’re going by means of the trouble of making an attempt to determine your tax legal responsibility, you may as properly simply file your tax return. By the best way, in the event you personal a enterprise, you’ll have to fill out Kind 7004 (it’s just a little extra difficult).

Request On-line

The IRS permits you to e-file an extension by means of the IRS web site. Or you may file an extension along with your tax software program. If you’d like easy-to-use tax software program with no hidden charges, take a look at Ramsey SmartTax.

For those who owe taxes and make a full or partial fee on-line, you’ll get an computerized extension with out having to fill out Kind 4868. However you continue to need to file your tax return finally.

Request by Mail

Just like the style of licking stamps and envelopes? You’ll be able to obtain Kind 4868 from the IRS web site, fill it out, and snail mail it to the IRS together with a test or cash order to your tax invoice. However snail is the important thing phrase to recollect right here. If you’d like even a fairly quick response from Uncle Sam, simply go surfing to your extension request.

How Lengthy Is a Tax Extension?

A tax extension lasts for six months. However you don’t need to push the deadline as a result of the IRS solely offers one extension. Miss the second deadline, and also you’ll be hit with failure-to-file penalties.

How Do I Know My Tax Extension Request Has Been Authorized?

Extensions are just about mechanically accredited. It’s uncommon for the IRS to reject a tax extension. Kind 4868 doesn’t even ask for a purpose to your extension. So, my canine ate my W-2 or I used to be too busy binge-watching Netflix are all okay excuses so far as the IRS is worried.

Once you file your extension electronically, you’ll obtain an digital affirmation. Hold on to that! For those who filed by mail, you in all probability received’t obtain a affirmation from the IRS. You’ll be able to simply assume your request was accepted. Or, in the event you don’t thoughts ready on maintain for hours, you would attempt calling the IRS to see in the event that they obtained your type.

Why Would possibly a Tax Extension Request Be Rejected?

In case your tax extension is denied, don’t freak out. You in all probability simply fat-fingered the shape. Rejections are nearly all the time as a result of a mistake in your private info. Merely resubmit your request and ensure to enter your Social Safety quantity (and your partner’s quantity) accurately.

How A lot Does a Tax Extension Price?

This one is uncommon for the IRS. A tax extension is free! It simply takes just a little little bit of time to fill out the shape to request an extension.

What Does a Tax Extension Not Do?

We mentioned it earlier, however it’s price repeating: A tax extension doesn’t provide you with extra time to pay your taxes. For those who owe taxes, you need to pay them by Tax Day. In any other case, you’ll need to pay curiosity and late penalties.

Determining how a lot you owe with out truly filling out your tax return might be difficult. The IRS affords on-line instruments to determine your tax invoice so you may ship in a fee along with your extension type.

For those who owe on taxes, do you have to even file an extension?

Even in the event you can’t pay a dime of your taxes by Tax Day, it is best to nonetheless file an extension. The penalty for not submitting your taxes is 10 instances extra extreme than submitting and paying late. Pay as a lot of your invoice as you may, and in the event you nonetheless can’t afford to pay your tax invoice after six months, look into organising a fee plan with the IRS.

What’s the IRS Penalty for Not Submitting Your Taxes on Time?

In relation to late penalties for not submitting your taxes, you would be in one in all two situations:

Are you anticipating a refund?

For those who’re anticipating a refund, you received’t get a penalty for submitting late. You simply received’t get your tax refund till you file. The IRS will maintain onto your cash for as much as three years.³ What occurs after three years? The IRS pockets the money.

Do you owe taxes?

Failing to file an extension may price you a fairly penny in the event you owe taxes. For each month (or partial month) you don’t file your return, you’ll pay an extra 5% of what you owe as much as 25%.⁴

For instance, let’s say you owe $1,000 and miss the April deadline and don’t file an extension. You lastly get round to submitting your taxes on Might 25. Your failure-to-file penalty can be $100 ($1,000 x 10%). You’ll additionally owe curiosity (presently 4% per 12 months) in your invoice.⁵

What’s the IRS Penalty for Not Paying Your Taxes on Time?

Let’s say you file an extension, however you may’t pay all of your tax invoice. The late fee penalty is way much less extreme than the failure-to-file penalty. As a substitute of paying 5% each month, you’ll pay 0.5% per thirty days as much as a most of 25%.⁶ You’ll additionally pay 4% curiosity.  

Let’s return to our instance above. Say you owe $1,000, however this time you file an extension. By Might 25, your penalty can be $10 ($1,000 x 1%), plus curiosity.

What Is the Deadline for Submitting a Tax Extension?

The tax extension deadline is all the time the identical as Tax Day. This 12 months it’s April 18.

Can I File an Extension After Tax Day?

Nope. You’ll be able to’t file an extension after Tax Day! You’re out of luck (and time) in the event you don’t ask for an extension by Tax Day. Meaning you’ll begin racking up failure-to-file penalties till you submit your tax return.

When Ought to You File a Tax Extension?

Now, let’s be clear. In case your tax scenario is fairly easy and also you’re simply feeling lazy, get your butt off the sofa and do your taxes! Higher but—seize a laptop computer and do your taxes out of your favourite spot in your sofa.

In any other case, listed here are some conditions the place it’s okay to file an extension:

1. You don’t have the paperwork you want.

Are you lacking your W-2, 1099 or different essential paperwork? In that case, file for an extension, collect these paperwork, and do your taxes.

2. You undergo an surprising life occasion.

Life doesn’t cease for taxes. For those who expertise a traumatic life occasion like a loss of life or sickness, don’t push your self to complete your taxes. File for an extension, focus in your life, and do your taxes later. Simply don’t overlook about them!

3. Your tax scenario is de facto difficult, and also you simply want extra time.

Itemizing tax deductions or proudly owning a small enterprise could make your tax submitting actually tough. In that case, pushing the deadline to October can forestall you from dashing by means of your taxes and making dumb errors.

However hear: In case your tax scenario is that difficult, it is best to work with a professional. What could take you days or perhaps weeks to do can take a professional far much less time. 

What if You’re Out of the Nation for the Tax Deadline?

For those who’re on a visit for work or on trip and also you miss Tax Day, the IRS doesn’t need to hear your excuses. You’re nonetheless anticipated to file your taxes (or an extension) earlier than the April deadline. The IRS does provide just a little little bit of grace in the event you’re residing exterior the nation on Tax Day.

Out of Nation

U.S. residents who’re residing exterior the States for work or navy service obtain an computerized two-month extension to file their taxes.⁷ Meaning you’ll have till June to file your return with out penalties. Nevertheless, curiosity shall be added to your invoice beginning on Tax Day.

Fight Zone Extension

Service members who’re deployed abroad in a fight zone or as a part of an operation defending nationwide pursuits don’t need to file a tax return or pay their tax invoice till 180 days after the deployment has ended.⁸ This additionally applies in the event you have been injured and hospitalized whereas serving.

Prolonged 2023 Federal Return Deadlines for California, Alabama and Georgia

Sadly, many individuals in California, Alabama and Georgia have been affected by storms and different pure disasters in 2022. To assist present some reduction, Uncle Sam has prolonged the federal tax deadline for individuals residing in storm-affected areas in these states till October 16. This extension applies to each private and enterprise returns.

For those who qualify for this extension, it means you’ll have extra time to assemble all of your tax varieties and paperwork for while you’re able to file on-line or attain out to a tax skilled. You may as well contribute to your IRA or HSA (Well being Financial savings Account) for the 2022 tax 12 months up till the prolonged deadline of October 16.¹⁰

State Tax Extensions

States that acquire earnings tax usually have the identical Tax Day because the IRS. (There are 9 states with no earnings tax.) All of those states provide some kind of extension. A number of states—Alabama, California, Colorado, Maine, Minnesota, Montana and Virginia—provide an computerized six-month extension. You don’t even need to fill out a type!

Fairly a couple of states let you have an extension in the event you filed a federal extension. This implies you received’t have to fill out any further varieties. Some states require you to pay a portion of your tax legal responsibility to qualify for an computerized extension. Often, states may provide a state-wide extension as a result of a pure catastrophe. Right here once more, an extension solely offers you extra time to file, no more time to pay your invoice.

Are You Having Hassle Doing Your Taxes?

Right here’s the factor: Getting a tax extension doesn’t clear up your preliminary downside—getting your taxes filed.

For those who don’t suppose you’ll be capable to get your taxes collectively in time, speak with a RamseyTrusted tax professional. These tax consultants have years of expertise and, imagine it or not, they love these things. They may also help you get your taxes collectively after you file an extension. Discover a tax professional close to you!

In case your taxes are fairly simple and also you need an easy-to-use tax software program that can provide you some peace of thoughts, take a look at Ramsey SmartTax! No hidden charges, no commercials, no video games. That’s the way it needs to be!