Filing A Tax Extension In 2023
What is a Tax Extension?
A tax extension is a request to the Internal Revenue Service (IRS) for an extension of time to complete and file your tax return. It is not an extension of time to pay taxes owed. The IRS grants most tax extension requests, which are generally valid for six months. This gives taxpayers extra time to gather and submit their tax information and to file their returns.
Who Can Benefit From a Tax Extension?
Anyone can benefit from a tax extension if they need more time to file their taxes. Some common reasons for needing additional time include being away or having limited access to documents, experiencing a personal or family illness, facing a backlog of work, or simply needing to take more time to understand the tax filing process. Taxpayers who are self-employed and expecting to owe taxes may also want to consider filing a tax extension.
How to File a Tax Extension in 2023
Taxpayers can file for a tax extension in 2023 by completing and submitting IRS Form 4868. This form must be filed by the regular tax filing deadline of April 15th. Form 4868 can be completed and submitted either electronically or by mail. Once the form is received by the IRS, the taxpayer will be granted an automatic six-month extension. The tax filing due date for taxpayers with extensions is October 15th.
What Information is Needed to File a Tax Extension?
To file a tax extension, the taxpayer will need to provide the following information: their full name, address, Social Security number, estimated tax liability, and the amount of taxes they have already paid. They may also need to provide information about any estimated tax payments they plan to make before the extended due date. Taxpayers will also need to provide a valid payment method in order to cover any taxes owed.
Are There Any Penalties for Filing a Tax Extension?
No, there are no penalties for filing a tax extension. However, if a taxpayer does not pay any taxes owed by the original due date, they may be subject to interest and penalties. Taxpayers should note that an extension to file taxes does not grant an extension to pay taxes owed.
What if I Can't Pay My Taxes in Full?
If a taxpayer is unable to pay their taxes in full, they should still file their tax return by the due date. The IRS offers several payment options, including installment agreements and online payment plans. Taxpayers may also be eligible for additional tax relief options, including offers in compromise or penalty abatement.
What If I Don't File My Tax Return by the Extended Due Date?
Taxpayers who do not file their tax return by the extended due date may be subject to late filing penalties. The penalty for late filing is 5% of the unpaid taxes for each month or part of a month that a tax return is late, up to a maximum of 25%. In addition to the late filing penalty, taxpayers may also be subject to late payment penalties and interest.
Conclusion
Filing a tax extension can be a great way to give yourself additional time to complete your taxes. Taxpayers should remember that an extension to file their taxes does not grant an extension to pay any taxes owed. Taxpayers should also be aware of potential penalties for late filing and late payment of taxes.