How to request a tax extension
Because sometimes you just need a little more time.
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While you might know fully well that Tax Day is in mid-April, it has a way of sneaking up on you. And should you need more time, the good news is that it's relatively simple to file a tax extension—as long as you request one before the deadline.
For the 2021 tax year, most filers' tax returns are due on Monday, April 18, 2022. (If you live in Maine or Massachusetts, you have until Tuesday, April 19, 2022 to file your tax returns due to the Patriots’ Day state holiday.) When you request an extension, that gives you until October 17, 2022, to tend to your taxes.
Let's take a look at why you might consider filing an extension this tax season, how to go about filing one, and software that could help you file an extension and gain some extra time.
Why you might consider filing a tax extension
Here are some common reasons why you might need to file a tax extension:
- You're waiting on some tax documents. This is probably one of the most common reasons why you might need to request an extension. If you're a freelancer, you might be waiting on some 1099s from your clients. Or maybe you misplaced a form you need to file your return, and are waiting for a replacement.
- You weren't prepared to file by the deadline. Ideally, you prepared months ago by gathering receipts and tax documents. If you find yourself falling behind, you can file an extension.
- Life throws you a curveball. The unexpected death of a loved one, getting divorced, moving, having a baby can all be life events that get in the way of filing your returns on by the mid-April deadline.
You're still on the hook for paying your tax bill on time
As long as you request an extension by April 18 (or April 19 or ME and MA folks), you'll have more time to file your tax return. However, that doesn't mean you have more time to make your tax payments. Money for Uncle Sam for the 2021 tax year is due on April 18 — even if you do extend.
"People often think they should extend when they don’t have funds to pay their taxes by the due date, "says Helena Swyter, a CPA and co-founder of the Chicago-based accounting services firm Sweeter CPA. Taxes paid after the due date are considered late and might be subject to penalties and interest.
If you aren't prepared financially to pay your taxes on time, Swyter recommends filing your tax returns and making a payment for part of what you owe. Then, apply for an installment payment plan for the remaining amount. If you owe less than $50,000, you're eligible for a long-term payment plan, and will have more than 120 days to pay the remaining amount. If you owe less than $100,000, you're on the fast track to pay back your taxes, and will need to pay your taxes within 120 days.
"While payment plans are also subject to interest, a taxpayer may reduce the total interest paid by beginning payments at tax time," says Swyter. "Rather than being surprised when trying to make a payment at the extension due date."
Let's say you need more time because you don't have all the necessary tax documents in hand by the deadline. So how can you make a payment if you don't know exactly how much you owe? You can make an estimated payment when you request your extension.
"This payment will be trued up on the final return filed by the extended due date," says Swyter. "If an overpayment is made, the taxpayer will get a refund at that point. Similarly, if more tax is owed, it will be paid then." It's best to overpay than underpay, as you might be on the hook for interest and penalties.
How to request an extension
Requesting an extension is fairly straightforward. You can file an automatic extension on your federal tax returns by filing a Form 4868 and send it online or via snail mail. If you need to request an extension on your state return, each state has slightly different requirements to request six extra months. Or, you can request an extension through the IRS's Free File. If you're working with a tax professional, they can help you request an extension.
Going the DIY route? Some tax filing software can help you request an extension on your tax return:
TurboTax. The winner in this year’s best tax software roundup, TurboTax's Easy Extension can help you file a federal extension and will alert you of confirmation that your request was received and approved. You can also send electronic payments to pay your taxes. It also offers information on how you can request an extension on your state returns.
H&R Block. You can file an extension through H&R Block's tax filing software. If you're currently living abroad, H&R's expat team can help you request additional time to file your return.
TaxAct. If you're filing your tax return with TaxAct, the software will help you request an automatic 6-month extension. Plus, TaxAct can help you gauge your how much you owe on your taxes and pay on time, lest you get dinged with late fees and penalties or pay a glut of interest fees.
While filing a request for an extension on your federal tax return might be fairly cut and dried, it's important to note that you're still on the hook for paying your taxes by the April 18th deadline. If you're doing your own taxes this year, software can help make the process easy for you, and make sure you pay on time to avoid any penalties.
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