3 Tips for Filing a Tax Extension

It is less than 2 weeks until April 15^th.  If you are running behind this tax season, you aren’t alone. According to the IRS, more than 80 million returns had been processed as of March 20, leaving millions of taxpayers who still haven’t filed.  In fact, each year approximately 7% of taxpayers and businesses need to file an extension.

If you decide to file an extension, below are 3 things to consider:

1. File an extension as soon as possible, if you can't make the deadline

If you can’t file your taxes by the April 15 deadline, then you need to file an extension.  It’s not hard.  Just contact your CPA (set an appointment first) and fill out the appropriate tax forms. The extension will automatically extend your filing deadline by 6 months to Oct. 15, 2015.

The extension gives you more time to file and allows you to avoid a late-filing penalty, however, it does not give you more time to pay. If you owe, you will still need to pay the balance on April 15. 

2. If necessary, request a payment installment plan

If you can’t pay what you owe by April 15, you can request a payment plan. The IRS has a program to let taxpayers make monthly payments on their tax bill. But there is a catch. There is a setup fee of $52 and there will be interest that’s adjusted quarterly and a monthly 0.25 percent late fee. 

If you want a payment plan, you still need to request an extension by April 15.  If you don’t, the IRS will charge a 5 percent monthly failure-to-pay penalty, up to 25% of the balance. If it goes more than 60 days overdue, the minimum penalty is $100 or 100 percent of the tax due, whichever is less.

3. Do not wing it!

If you are hustling to get your taxes done by the April 15 deadline, you may want to slow down.  Several people will just guesstimate some of their tax information when they feel like they don’t have time to get the correct information.  This is not good!   You could miss some important deductions, have administrative errors, and trigger an audit later.


Contact Hardee Accounting if you are interested in filing an extension.