To be eligible for the extra six months, you have to properly estimate your tax liability and enter it on Line 4 for Form 4868. The IRS will contact you if your request is denied.
Form 4868 does not extend the deadline for paying your taxes, so if you owe anything, try to pay it as quickly as possible to minimize the interest and late payment fees you’ll owe.
Mark October 15 on Your Calendar
After you’ve filed Form 4868, go ahead and mark October 15 on your calendar and set a reminder on your phone. October 15 is your new due date to file your return and pay your balance, after you’ve filed for an extension.
If you file your taxes after the deadline, you should be prepared to pay a late filing penalty. The penalty is typically 5% of the amount due for each month or part of a month your return is late (up to 25%). If your return is more than 60 days late, the minimum penalty is $210 or the balance of the tax due on your return – whichever is smaller.
But, you might not have to pay a penalty. If you’re due a refund, the IRS usually will not charge you a penalty for filing late.
You also might not owe a penalty if you have a reasonable explanation for filing late. If that’s the case, attach a statement to your return fully explaining why you’re filing late.
Set Aside Cash for Interest
If you’re going to owe taxes, you should set aside some cash for the interest. You can estimate what you’re going to owe by using Form 4868.
Typically, you’ll have to pay half of 1% of any tax (other than estimated taxes) not paid by April 17 for each month or partial month you’re late. The maximum penalty is 25%.
You won’t be charged if you have a reasonable explanation for not paying on time. For example, if you paid at least 90% of your total tax liability on or before April 17 through withholding, estimated tax payments, or payments made with Form 4868 and if you pay the remaining balance with your return.
If you didn’t file for an extension, file your tax return as quickly as possible. Go ahead and choose a day to file your taxes within the next couple of weeks – and stick to that day. Even if you can’t pay your balance yet, go ahead and file and get that part over with.
Ask for Help
If you have any questions or you’re not sure what to do, ask a tax professional for help.