Tax Extension 2016

WHAT YOU NEED TO KNOW ABOUT FILING
TAX EXTENSIONS 2016

Whether you file taxes online or file tax return forms via mail, the general process to request an extension on the tax deadline is the same. The tax extension deadline is the regular tax deadline. To qualify for a tax extension, you must file the appropriate form by the standard tax filing deadline of April 18, 2016 (or April 19, 2016, if you live in Maine or Massachusetts).

Once you’ve filed your completed IRS tax extension form, you’ll automatically get the six-month extension to file your IRS tax return.

Most taxpayers can qualify for the general automatic tax extension from the Internal Revenue Service if they can’t file their tax returns by the due date. The automatic income tax extension allows you six more months to submit your federal tax forms.

Six months is generally the longest amount of time allowed for an extension for filing taxes, though there are certain exemptions to this general rule. Note that a federal tax extension does not mean that the deadline to submit your state taxes is extended; each state has its own requirements for filing an extension.

Some taxpayers will not qualify to file extensions of any kind. People who are under court order to pay by the regular due date will not be granted more time to pay or file their taxes. Also, if you want the IRS to figure out the taxes you owe or that will be refunded, you will not qualify for the six-month extension.

Even if you file an extension, you will have to pay penalties if you do not pay your taxes by the regular tax due date. Filing a tax extension keeps you square with the IRS and lets them know that you will be filing your complete paperwork later, but it does not grant you more time to pay the taxes you owe. If you might be subject to a penalty, keep the following in mind:

1.  The penalty for paying late is 5 percent for every month that the outstanding tax is not paid.
2.  The maximum penalty for paying late is 25 percent of the total.
3.  The minimum penalty is $135 or 100 percent of the balance due, whichever is smaller.

If you are going to pay your taxes late, you can avoid a penalty if you can show the IRS that you have a reasonable cause for not paying your taxes on time. If you believe that you have reasonable cause, attach a form explaining your reasons to your federal tax extension form. Note that you might have to pay interest on unpaid taxes. Currently, this rate is about 3 percent annually.

Much like the late payment penalty, you can avoid the minimum penalty by showing the IRS that you have a reasonable cause for filing after the due date. Attach a statement to your form with an explanation about why you filed taxes after the due date to apply for this extension. You do not have to, nor should you, include the tax extension form.

The interest on your late taxes will accumulate as tax debt until you pay the IRS in full. So although an extended deadline might sound good, it’s wise to file for a tax extension only if absolutely necessary.

You can find more information at IRS.gov or by calling the IRS tax help line number at 800-829-1040.

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Tax Deadline ~ April 18, 2016

 

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