Tomorrow is April 15, the deadline for filing income tax returns to the IRS in United States. IRS is the government’s tax collection agency and it invokes great dread and fear among the denizens.
A popular question asked during the Tax filing period is, what happens when you can’t make the deadline of paying taxes by April 15. In that case you apply for extension and you use the form 4868.
Basically there are some tips to follow in case you miss this April 15 deadline to file your returns. Hope you find it useful. But note, these steps have to be taken immediately if you don’t want to be penalized by the IRS. Time is of crucial essense.
Form 4868 Tax Extension
1. The best part is, you are legally allowed an automatic 6 month extension. But the bad news is you must prepay taxes otherwise you will have to pay interest on the amount owned. If you had a pay withholding or have already payed estimated taxes, there is no cause of worry or late fees.
2. Even though you get an automatic extension, you still need to file a form 4868 on or before the last date (April 15th in our case). The form is very simple and easy to fill out. You only have to enter your name, social security, address etc and the approximate value of taxes owned.
3. If you happen to be out of the country, there is a box on the above form that you need to check mark. If you are a citizen or a permanent resident, the automatic extension is limited to two months instead of six.
4. Stressing the need to pay your taxes on time, remember with the extension you still pay interest and late fees. The maximum interest is limited to 25%.
5. Also keep in mind that in addition to interest, you might be charged a late penalty fee. The filing penalty is capped at around 5% for the amount due for each month etc.
6. However, if you can show reasonable cause for late payment or not paying on time, the late fee will not be charged. If you had already paid off 90% of theÂ taxes owed to the government, IRS will automatically assume you had a probable cause and excuse you from the penalty.
7. If you make use of the online technology to file your taxes, you can authorize your financial institution to automatically deduct the taxes. However double check with the institution to make sure they allow electronic deduction etc.
8. You can also pay your taxes to the IRS using your Credit Card. IRS has an agreement with Visa, Discover, Master Card etc. However keep in mind that the CC company may also charge a small fee for this transaction.