Taxes 2022: Here’s how to ask the IRS for a tax extension

For the past two years, the IRS has extended the deadline for filing taxes due to the COVID-19[feminine] pandemic, giving Americans more time to wrap up their statements. This year, Tax Day returns to its usual deadline, with returns due April 18.

The good news? For those who need more time, requesting an extension is quick and easy. And that will give you until October 17, 2022 to send your tax return to the IRS.

Americans are already behind in the current tax season, according to the latest IRS statistics. About 91 million people filed their returns as of April 1, up from 93 million filers in the same time last year, when taxpayers had an extra month to send their taxes to the IRS, the agency says. .

In a typical year, Americans file about 160 million tax returns, which means some 70 million still have to do so before the April 18 deadline.

“People tend to wait until the last minute,” noted Eric Bronnenkant, tax manager at Betterment. “You can get an extension for about six months, but one of the most important things to know about filing an extension request is that it’s not a pay-as-you-go extension.”

In other words, if you owe the IRS this year, you still have to pay Uncle Sam by the end of April 18, even if you get an extension through October. Here’s what to know about how to get an extension from the IRS.

When is this year’s filing deadline?

Typically, the deadline for filing tax returns is April 15, but this year taxpayers have until April 18 to file their return because the 15th falls on Emancipation Day, which is observed as a public holiday in Washington, DC. As a result, the IRS offices will be closed on April 15. .

Residents of Maine and Massachusetts are given an extra day to file — until April 19 — due to those states recognizing April 18 as Patriots Day.

Taxpayers who get an extension to file their taxes will have until October 17 to file their taxes. Generally, the extension gives people until October 15 to file their forms, but because that date falls on a Saturday, taxpayers have until the next business day, October 17, to file.

How do I get a tax extension?

First, you’ll need to apply for an extension by April 18 or you could face a “failure to file” penalty, the IRS said. (See more on this penalty below.)

To request an extension, you will need to complete Form 4868. This is a one-page form that asks for basic information such as your name, address, and social security number. It also asks you to estimate how much you owe in taxes.

This form can also be used through the IRS Free File Service and can be used regardless of income. Generally, only people with an adjusted gross income of less than $73,000 can use the Free File service, but anyone can use it to request an extension, the IRS said.

What? Do I still have to pay the IRS?

It’s true – getting an extension to file your tax return doesn’t get you an extension to pay what you owe the government.

The IRS expects people to make an effort to pay what they owe, Betterment’s Bronnenkant said. This can be difficult for people who haven’t filed their tax return yet, but it’s best to estimate in good faith.

“If your previous year is a good barometer for your current year, start there to come up with some sort of reasonable estimate,” Bronnenkant said. “Don’t let the perfect be the enemy of the good.”

For example, if you estimate you owe $10,000 but actually owe $11,000, you will be charged an underpayment penalty. But it will be less painful to face an underpayment penalty of $1,000 rather than the full $11,000 you owe, Bronnenkant noted.

What if the IRS owes me a refund?

If it turns out that the IRS owes you money, you will have to wait for the IRS to process your tax return for the refund. So if you wait until October 17 to file, you won’t get the refund until about three weeks after that date, according to the IRS’ estimate that most taxpayers receive their refund within 21 days following deposit.

If you think the IRS owes you money, you don’t have to send the IRS a check until April 18, of course. However, you need to be sure that your appraisal is correct or you could face penalties for failing to pay your debt to the IRS.

What are the penalties for non-declaration?

If you are not going to complete your tax return by April 18, it is best to request an extension as the penalty for failure to file is severe. It is based on the lateness of a tax return as well as the amount of unpaid taxes as of the due date.

The penalty rate is 5% of unpaid taxes for each month of late filing, capped at 25%. Take a taxpayer who owes $10,000 but isn’t asking for an extension — if he files two months late, he’d pay $500 a month for a total of $1,000 in penalties.

What are the penalties if I don’t pay enough?

The penalty for failure to pay is less punitive than that for failure to report. The IRS charges 0.5% of unpaid taxes for each month, with a cap of 25% of unpaid taxes.

Take someone who pays an estimated tax of $10,000 by April 18, but turns out they actually owe $11,000. They will face a 0.5% fee on the additional $1,000 they owe the IRS. If they file in June – two months after the tax deadline – they will owe $10.

Should I file an extension with my state?

It depends. Once you have requested an extension from the federal government, check to see if you will need one for your state. According to the IRS, “State filing and payment deadlines vary and are not always the same as federal filing and payment deadlines.”

Some states will automatically grant you an extension on your state taxes if you receive a federal extension. In other states, you will need to apply for an extension separately. The Federation of Tax Administrators offers an overview of how to verify tax information for the state in which you live.

If you live in one of the nine states with no personal income tax, you’re probably safe. However, two of those states – New Hampshire and Tennessee – still tax investment income, so if you have income from dividends, stock sales, or other investments, you may still need to file a tax return in these states.

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