Tax day is April 18th this year, which gives you a few extra days to complete your taxes! However, if you won’t have your taxes done by then it’s a good idea to file for a tax extension. There are many reasons individuals may need to file a tax extension; a few reasons include an unexpected personal emergency, incomplete tax documents, or making last minute contributions to your IRA. Whatever the reason may be, if you are unable to meet the tax filing deadline, it is important to file for an extension. The main reason to file on time is, if you don’t, you will be hit with a failure-to-file penalty, which can add up to 25% on your taxes due. A tax extension gives you six extra months to finish your taxes.
An important thing to remember, an extension won’t work if you are filing an extension because you owe taxes you are unable to pay. Filing for a tax extension only gives you the extra time to file, not to pay. Even if you file for an extension, you still need to pay any taxes you owe by April 18th. If you don’t pay, you may encounter penalties and interest. When you file for your extension, you will need to indicate if you owe or if you will be getting a refund. This number can be estimated and this calculator can help you determine the estimated amount.
If your reason for filing an extension is because of owing money, the IRS has some options to help you.
- File a short extension, there is still a penalty but it won’t be as much.
- Set up installment agreements. Installment agreements allow you to set an amount per month that you will pay until your taxes are paid off.
- Pay by credit card or loan. A home equity loan is a smart way to pay what you owe, since the interest you have to pay is tax deductible. The IRS also suggests paying with a credit card or loan, which allows you to pay for your taxes all at once, and then the penalties and interest, will not be as high as if you would pay the IRS monthly.
Still need to file an extension? Give me a call and let me help you!
A Mazzo Accounting provides a variety of accounting services to individuals and businesses in the Wyomissing, Reading, West Reading, Sinking Spring and Kenhorst areas as well as towns and villages around the Greater Reading area. Our services for small to mid-size businesses include taxes, payroll, accounting and bookkeeping services. We also provide a variety of services for individuals and they include tax return preparation as well as some accounting assistance.