Are You Filing Taxes Late? Follow These Steps for An Extension…
Editor’s Note: When you miss a deadline, you may think you’ve missed an opportunity to file entirely. This is not the case. Read on to figure out what to do after a missed a deadline and are filing taxes late.
Say it’s Tax Day… What happens if you miss the tax filing deadline, you fail to file an extension and today passes you right by like any other Monday?
You can still file. All hope is not lost. In fact, if you’re due for a refund, there is no penalty for filing late.
Late Filing Penalty
If you owe taxes, you’ll be subject to a late filing penalty. This is 5% of your unpaid balance per month, or part of a month, up to a maximum of 25%. Also, whether you filed an extension or not, a late payment penalty of 0.5% will also accrue each month or part of a month until the balance is paid in full. The IRS also charges interest on unpaid tax from the due date of the return until the date of payment, even if you were granted an extension of time to file the return.
How to Submit a Tax Filing Extension
While it’s a good practice to file your tax return as early as possible, if you can’t complete the return on time, you have the option to file an extension. To do this, you or your chosen tax preparer to file (Form 4868).
Filing an extension will give you another six months of breathing room. But, there are a few rules you need to follow.
- If you owe the IRS, you need to make an estimated payment in order to avoid the failure-to-file penalty.
- Most states require you to file a state extension in addition to a federal extension. Natural disasters also have an impact on tax filing deadlines, for example. (This IRS resource has a full list of natural-disaster-stricken states and their respective filing procedures.) Make sure to check with your state government for specifics.
If you owe, the sooner you file, the smaller your late filing penalty will be. If you’re due a tax refund — well, what are you waiting for? Get ’em done already and get that refund in your hands!
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