Why Extend Tax Filing?
An extension will give you extra time to get your paperwork to the IRS, but it does not extend the
time you have to pay any tax due. Depending on which type of extension you need to file, the extension
will allow you an additional 3-6 months to file your tax return.
You will owe interest on any amount not paid by the April 18 deadline, plus a late payment penalty if you have not paid at least 90 percent of your total tax by that date.
Filing taxes after the deadline typically means that you will incur some pretty harsh penalties by the IRS. However, there are a few situations in which the IRS does grant more time to file a tax return.
Out of Country:Individuals who live and work out of the country automatically receive a two month extension without filing a Form 4868. However, a return must be filed by October 17 at the latest. This also applies to US military personnel working overseas.
Combat Zone:In general, the deadlines for performing certain actions applicable to taxes are extended for the period of service in a combat zone, plus 180 days after the last day in the combat zone. This extension applies to the filing and paying of income taxes that would have been due April 18.
Reasonable Cause:The IRS does also waive penalties for those individuals and businesses that had Reasonable Cause to not file or pay on time. This is a more subjective reason to be reserved for the most extreme circumstances, and to be determined by the IRS.
Extend Your Deadline:An individual, business, or Exempt Organizations may elect to file for an extension of up to 6 months. This is not an extension of time to pay, this is an extension of time to file the return itself.
Pros and Cons of Filing a Tax Extension:Preparing the information necessary to file your tax return can be an overwhelming task and you may wonder whether you should file a tax extension to allow yourself more time. Here are some of the pros and cons regarding tax extensions.
- You will have an additional 6 months to complete your taxes
- You avoid late fees
- You do not have to provide a reason for filing an extension
- You can improve the accuracy of your return
- You can save on tax preparation fees
- Filing a tax extension is easy when you E-File
- You still have to file the tax extension by April 18, 2016
- Tax extensions do not extend the time to pay any tax due
- You will have to wait for your refund
- You may have to file additional forms for state returns