The IRS gives taxpayers until April 15 to file and pay their federal income taxes. People who cannot make this deadline to file can request an extension until October 15 by filling out and submitting IRS Form 4868. This extension will grant taxpayers extra time to file their returns. They must pay their estimated amount of taxes by the April 15 deadline, however.
What to expect if you miss the Oct 15 deadline;
- You’ll owe more interest. A tax extension gives you more time to file your return, not more time to pay.
- You may owe a higher late-payment penalty. The IRS’ late-payment penalty normally is 0.5% per month of the outstanding tax not paid by the April deadline. The maximum penalty is 25%. You’re supposed to pay at least 90% of your tax liability by the April deadline, but this year you might catch a break on the penalty if you’ve paid at least 80% of your actual tax liability by the April deadline and you pay the rest with your return.
- You may owe a late-filing penalty. The IRS can also sock you with a late-filing penalty of 5% of the amount due for every month or partial month your tax return is late. The maximum penalty is 25% of the amount due.
The extended filing deadline offers a chance to make a few smart moves. The self-employed can make 2018 contributions to a SEP IRA, for example, until October 15. The mid October deadline also offers a mulligan to taxpayers who contributed too much to a traditional or Roth IRA for 2018. Taxpayers can withdraw excess 2018 IRA contributions (including earnings) by October 15 to avoid a 6% penalty. If you already filed a 2018 tax return, you may need to file an amended return.
Important friendly reminder: Don’t blow off filing just because you can’t pay the bill. The IRS offers installment plans if you can’t pay your taxes!!