Filed an Extension?
According to Merriam-Webster’s Dictionary, extension, or the state of being extended, refers to “an increase in the length of time given to someone to hold office, complete a project, or fulfill an obligation.” In the case of filing tax returns, the Internal Revenue Service offers the option to apply for an extension of time to prepare and file federal tax returns.
Although tax filing extensions were available to tax payers who needed more breathing room to complete their tax returns prior to the April 15th deadline, it was just that… an extension of TIME to file ending on October 15, 2019. Instead of your tax return, the IRS Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Returns, should have been submitted to the IRS on or before the April deadline allowing for the “no questions asked” extension approval. Remember though… this was an extension of time to file, not an extension to pay, your taxes. To avoid late payment penalty and interest, tax payers should have paid an estimated tax liability amount at the same time.
With the October 15th deadline only two months away, what to do now? The IRS will not be sending out the more than 14 million friendly reminders to file your return by the extended deadline, but a couple of reminders to help you meet the deadline are…
1. Estimated taxes – If you paid an estimated tax amount when filing the extension, now is the time to balance it out. If estimates were not on track and you find out you still owe, now is the time to pay in FULL to avoid any additional penalty and interest charges that will be backdated to April 15th. Along with the tax return needed to be finalized, all payments due need to be paid.
2. Are you owed a refund? If Uncle Sam owes you a refund, missing both the April and October 15th will reduce your refund. The IRS will likely deduct overdue penalty and interest owed from your refund. If you want to collect this year, meeting the October 15th deadline isn’t optional.
3. File your return – By far, the most efficient way to file is electronic filing and is still available for sending extended tax returns. E-File is the IRS’ electronic filing program and is usually free via your tax professional or tax preparation software.
4. If you cannot pay what you owe – if what is owed to IRS is more that you can pay in one lump sum, the IRS offers options to pay in installments. The IRS allows you to settle your tax obligation with a payment plan ONLY if your tax returns are up to date. Based upon your income and expenses, the IRS will determine how much you can afford to pay monthly in order to pay off your delinquent tax debt. To set up an installment plan with the IRS, start here.
There are many benefits to filing and paying your taxes on time, including avoiding additional penalty and interest, reduction of your refund, or the delayed headache of procrastination. The sooner you get your return done, the more time you have left to enjoy the rest of the year.
By Susan Amsler
August 12, 2019
Randolph Business Resources, LLC.
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