For many California residents, filing federal tax returns by April 15th can be challenging. Perhaps you simply need more time to work on your returns, or you were late receiving documents that you needed to complete the return. In these scenarios, the Internal Revenue Service, or IRS, allows you to request an extension to get your taxes done.
Individuals will need to complete and file Form 4868 to request an extension. Generally, the IRS allows an additional six months to file taxes upon submission of this form. The new deadline is in October.
You Still Need to Pay Your Taxes on Time
Although you may be granted the extension, you still must pay your taxes on time and must provide an estimate of your tax liability for that year. The extension only allows extra time to file the return, not to make the payments. Late payments may subject you to penalties from the IRS.
Combat Zone and Outside of the U.S. Exceptions
Other rules may apply if you are in a combat zone or are living outside of the United States. For example, if you are a United States citizen, but live outside of the country, you may automatically get an extra two months to both file and pay your taxes. Those who are in areas that have been impacted by natural disasters may also be automatically granted an extension.
Consulting with an experienced California tax attorney is necessary to ensure that you are meeting IRS requirements for such a request.
Business Tax Extensions
Businesses and corporations may need to file Form 7004, “Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns” or Form 1138, “Extension of Time for Payment of Taxes by a Corporation Expecting a Net Operating Loss Carryback.”
Many individuals are able to file a request for an extension online using Free File. Those whose income is less than $66,000 have this option. Those who have made more than $66,000 may be able to use Free File Fillable Forms to request an extension. These individuals must know how to do their taxes themselves.
If you prefer sending these forms in by mail, you may do that as well. You may print off the form and mail it to the IRS.
Important Things to Remember
There are some important points to remember if you wish to file for a tax extension.
First, the IRS does not automatically grant all requests for an extension. If the IRS believes that the estimated tax owed on your form is not reasonable, the extension may be denied, and you may be penalized for filing late.
If you estimate that you owe too little in taxes when you request your tax extension, interest will be owed on the difference between what you paid and what you actually owed.
If less than 90 percent of the taxes owed is paid, the penalty is 0.5 percent of the difference until the balance has been paid.
If you are interested in requesting a tax extension, you must have done so by April 15, 2019. The IRS does not charge a fee for an extension and many requests are granted, so there are no disadvantages to seeking one. When taxpayers rush to complete their tax returns, they may make mistakes that require many extra steps to correct—therefore, it is better to simply request the extension and ensure all information on the return is accurate.
Contact Our California Tax Attorneys Today for Help with Tax Matters
If you have concerns about your tax return or other tax matters, call the experienced California tax attorneys at RJS Law. With offices in Orange County, Beverly Hills, and San Diego, we are able to meet with our clients at their convenience. To schedule a free consultation, contact us today.