Many people joke that there’s only two things constant in life: death and taxes. However, they miss the part about tax extensions. The U.S. Internal Revenue Service, or IRS, requires all taxpayers to pay taxes by the April 15 deadline. However, an individual who owes money may not have the money to pay his taxes at the due date. Fortunately, for anyone who can’t make pay, the IRS does offer the opportunity to pay taxes later.
Paying Taxes Later
The IRS tax extension allows a taxpayer extra time to file and pay taxes without receiving a penalty for filing late. For example, the extension allows a taxpayer to file October 15 instead of April 15. However, to receive an extension an individual must file the tax extension form 4868 by the tax filing deadline.
Filing out the Form
A taxpayer can request an extension in two ways: through the mail or E-File. The process is the same for both. However, the stress-free option may be to e file tax extension. Before mailing the form, a person must print and complete the form– then hope it’s received before April 15. The IRS receives an electronically submit extension faster.
Don’t Wait Until October
Although preparing an electronic extension does give a person approximately 6 months to pay taxes, he shouldn’t wait until September or October to prepare. Once he receives an extension, he must start gathering the money and required documents. From April to October the IRS charges a failure to pay penalty of .5 percent every month. After the 6 month extension ends, the penalty jumps to approximately 5 percent each month.
Last Word about Filing an Extension
Anyone interested in paying taxes later than April 15 should submit the extension form online prior to the tax deadline. All the taxpayer has to do is estimate the taxes owed and include a nominal portion with the extension request. Many tax preparation companies offer to file the extension for free, but an individual doesn’t have to consult a tax professional before filing.