This is a guest post by JoeTaxpayer. With the tax deadline quickly approaching, I asked Joe to share the steps and reasoning that one would need to file a tax extension. As a reminder, here’s what happens when you file your tax return late or not at all or what you need to know about filing an amended return.
You’ve just been busy, I know, me too.
Your hard drive crashed and you need to gather up your notes and all your stock transactions. Your aunt in New Jersey passed away, and suddenly April 14th is here, now that you’ve returned from the funeral.
I don’t care what your reason is for needing to file late (although I am sorry if you lost a relative or loved one) and truth be told, neither does the IRS.
They do, however care about two things, first that you tell them via Form 4868 (Application for Automatic Extension of Time to File U.S. Individual Income Tax Return) and that you pay most of your tax liability for the year. In this case, most means that if you owe the greater of 10% of your final tax liability or $1000 you will be hit with a penalty in addition to interest on the amount owed. So long as you’ve paid this amount, you will only be charged interest.