Many people fail to file their tax returns before April 15th due to the time and effort they have to spend doing the task. This is one of the primary reasons why people file for a tax extension.
How to file a tax extension
- When filing a tax extension, understand there are certain limitations that come with it. One of these limitations is that the IRS allows people to extend submitting their returns by 6 months. This does not apply to tax payments, which have to be paid on or before the 15th of April.
- The last date to file an extension is April 15th. Failure to do so will lead to penalties amounting to a minimum of 5% and a maximum of 25% on unpaid taxes. Failure to pay the penalties will lead to more fines.
- Some of the tax return forms you may need when filing include 4868 for an individual and 7004 for a business entity. These forms can be found within the IRS website or on free e-file websites. You will have to include your name, contact information, and social security number when filing.
- It is important that you do not make any entry mistakes or input wrong information as this could be grounds for the dismissal of your extension request. However, the IRS tends to approve most extensions, regardless of the reason. With e-filing, you can track the progress of your request.
- Gather all the relevant documents and conduct in-depth research before filing your returns to ensure that everything is in order and as accurate as possible so that you will not incur penalties.
The points mentioned above are very important when it comes to filing for a tax extension. Properly understand them so the process goes as smoothly as possible. Of course, make filing for an extension your last resort so that it does not become a habit.
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