Need An Extension On Taxes – AICPA Tax Practice and Ethics Lead Manager April Walker joins Yahoo Live to talk about filing conditions for tax extensions, important dates for taxes, the IRS backlog, and the importance of staying organized.
My guest says it’s still not too late to prepare or file an extension on time. As part of our Tax Made Simple series presented by Tax Act, I’m joined by April Walker AICPA Lead Manager in Tax Practice and Ethics. Thanks for joining me today.
Need An Extension On Taxes
So first, how do you know if you need to file an extension? Who is it best suited for?
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April Walker: Okay. So the good thing about the extension is that it is automatic. So you don’t need to be able to file an extension. So it could be anybody who’s having trouble gathering their data, or maybe they have a business form, and they’re waiting for their CPA to prepare their business statement.
And it comes to April. This year it is April 18. So this is one thing I want to draw everyone’s attention to. It’s Tax Day this year on Monday, April 18. So anyone who just –
You’re saying, for that April 18th deadline, any other deadline that people should be aware of maybe to file for an extension and then how they’re going to follow through after that?
April Walker: Sure. So how you file an extension is very simple. If you are working with a CPA, you should let them know, and they can handle it for you. One really important thing about an extension that I didn’t talk about is that it extends the time to file, but it doesn’t extend the time to pay.
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So if you’re going to pay money, if you historically owe money or if you have an event, a stock sale or something like that, that you know you’re going to pay tax on. , so that tax is still due in April. 18th So even if you’re not quite ready to file, you’ll need to be prepared to make those payments.
So you can do it in a few different ways. You can pay online at iir.gov. Again, if you work with your CPA or accountant, they can help you draft the account through their software. If you’re using your own software, like you mentioned the Tax Act – the Tax Act, if you’re filing your own software, it will take you through the process of filing that extension.
Another thing I want to make sure everyone knows is that the federal– so the federal return is going to be on April 18th. Usually, a state return also occurs at the same time. And in general, the federal form enlarges the state. But there are one or two states where this is not the case. New York is one, for example.
So you just need to make sure you take care of your state return if you decide it’s right for you to file an extension, to take care of both the federal and state returns.
Tax Day 2023: How To File For An Extension
But in terms of changes, I mean, there were several things last year. You’ve got the Covid incentive checks, the ongoing IRS backlog, which combines child tax credits. What is the best way to understand and organize it, and especially if you don’t have your previous forms yet?
April Walker: Well, yeah, sure, you’ve heard a lot about the IRS backlog. And if you file a paper return, you may not have been processed yet. So that could be another reason, another very good reason to extend if your 2020 return hasn’t been processed yet.
It’s just a matter of sorting out, as you mentioned, the higher child tax credit, that and then the third economic impact payment, the incentive payment, so another good reason to file an extension is if you’re not sure about those payments. Whatever the reason. You need to make sure that the payments you enter on the tax return are accurate because if you enter the correct amount and you submit your return and the number is incorrect, the IRS will immediately flag that form. has been
And even if you were expecting a refund, it’s getting flagged, and it’s going to be delayed. So rightly, everyone has their own system for organizing their tax data, whether it’s a folder or an electronic organization. So I don’t like to tell people how to organize. But the important part is getting organized and making sure you get it right, especially this year, because you definitely don’t want any more delays before your return is processed.
What If I Need To File For A Time Extension On My Tax Refund?
That is you At least people have had their heads up for more than a month. We appreciate your coming forward. There April Walker, AICPA lead manager in the tax and ethics practice. Thank you for your time today. April 18 is the deadline to file your tax return, and it’s also the last day to file a free tax extension.
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A tax extension will give you an extra six months to file your tax return, but you will have to pay any tax now. Sarah Fatt/
Didn’t File Taxes In Time? Here’s How To File A 6 Month Extension
If you haven’t done your taxes yet, you’re not alone. According to financial company IPX1031, nearly a third of taxpayers wait until the last minute to file their tax returns.
But like it or not, taxes are due today — April 18, 2023 — and if you can’t get them done by midnight, you’ll want to file a free tax extension to avoid potential penalties.
This story is part of Tax 2023, coverage of the best tax software, tax tips and everything else you need to file your return and track your refund.
In addition to filling out your tax return, good tax software can help you file a tax extension, but you can also submit IRS Form 4868 by mail—as long as you postmark it today.
Tax Day 2023: When Is The Last Day To File Your Taxes?
Read on to learn how to file a tax extension and learn more about the money you could be putting off if you do. For more information, here’s how to file your taxes for free and track your IRS tax refund after you file.
If you plan to file a tax extension this year, you will need to submit Form 4868(PDF) to the IRS on paper or electronically using e-file before the April 18 deadline. As long as your electronic extension is submitted by midnight, or your letter is postmarked today, your extension should be good.
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However, if you believe you owe tax, you will need to pay your estimated income tax using Direct Pay, the electronic federal tax payment system, using a debit or credit card. If you don’t pay your estimated taxes with your extension and you owe money, you’ll owe interest on that money when you file, as well as a potential penalty.
Tax Day Is Monday, What To Do If You Need An Extension
Some taxpayers are given more time to file automatically. This includes military personnel serving in a combat zone or individuals in federally declared disaster areas. This year, the IRS extended the tax deadline for residents of seven states. US citizens living outside the country have until June 15 to file.
No. Extending your filing deadline does not delay when you should pay taxes you may owe. According to the IRS, you need to estimate and pay at least 90% of your tax liability by the deadline to avoid late fees. Otherwise, you’ll have accrued interest on what you owe, which you’ll eventually have to pay — along with possible penalties — on top of your income taxes.
The late payment penalty is usually 0.5% per month of tax not paid by the filing deadline, with a maximum of 25%. The IRS may also impose a late filing penalty of 5% of the amount due for each month or partial month that your tax return is late. If your return is filed more than 60 days after the due date, the minimum late filing penalty is either $450 or 100% of the unpaid tax (whichever is less).
For individual taxpayers, penalties and interest will not accrue until the amount you owe is paid in full. For more information about penalties or to set up a payment plan
How To File A Business Tax Extension 2023
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