IRS Form 4868: Application for Automatic Extension of Time to File
You are granted an automatic 6 month extension of time to file your income tax return by filing Form 4868 by the due date, April 15th. Filing Form 4868 is available by mailing in a paper copy of the form or you can e-file Form 4868. A federal tax extension also extends your state income tax return, as well.
If you are out of the country on April 15th, you have until June 15th to file your extension. A properly filed Form 4868 tax extension gives you until October 15th to file the return.
An extension of time to file is not an extension of time to pay. This article will outline what a federal tax extension provides and what is not granted an automatic extension.
Payments with Form 4868
You will still face interest and penalties if your taxes are not paid by April 15th. An estimate of your tax liability must be included with the extension, but it is not required you pay the liability for the extension to be valid.
Payments are made by check, credit/debit card, or automatic funds transfer from your checking or savings account. Paper filed extensions are usually paid by check; e-filed extension payments are easy to make by funds transfer.
Form 4868: Filing an Extension
Interest and Penalties
Interest: You are still liable for interest from the due date until the date the tax is paid, even if you have a valid extension or are granted a 2 month extension because you were out of the country. All taxes are due April 15th. Interest will accrue from this date until paid no matter what.
Late Payment Penalty: A late payment penalty is assessed for all taxes unpaid by the regular due date. The penalty is .5% (one-half percent) per month until the tax is paid. This penalty cannot exceed 25% and is in addition to interest charges listed above.
If you have reasonable cause for the underpayment and you paid at least 90%, the late payment penalty is waived. Attach a statement with your reason for the underpayment to the tax return when filed.
Late Filing Penalty: Late filed returns are assessed a 5% per month penalty for any balance due. This penalty is capped at 25% and is in addition to the late payment penalty and interest. For returns filed 60 or more days late, the minimum penalty is $135 or the balance due, whichever is less. This penalty is avoided for reasonable cause and the explanation should be attached to the return when filed.
An automatic extension of time to file is granted by filing Form 4868. The late filing penalty is avoided if you file by the extended due date, usually October 15th. Interest and late payment penalties still apply.
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