What to do if you run out of time to file your taxes?

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Time flies and April 15 can encroach on us surprisingly fast. Gathering and sorting all required information and getting tax returns prepared can take more time than initially anticipated, not to mention any unfortunate event that can derail our plans. If you run into situation where you feel that there won’t be enough time to file your tax return before the due date, you may have to file for extension.

Last year some 10 million taxpayers filed for extension, and the most common of them being an automatic extension of time to file income tax return (Form 4868). Not every taxpayer falls under that umbrella, and for that reason IRS has created several types of extension to address all issues US taxpayers may face.

Forms to file extension on taxes

There are several different forms to request extension of time to file taxes. Most of them are oriented towards individual taxpayer, with few aimed at business units. The differences between them arise from the fact that some taxpayers reside abroad, are out of the country when the automatic extensions expire, or serve in combat zone.

Forms for extension of taxes include (the top tax forms located here):

  • Application for Automatic Extension of Time to File U.S. Individual Income Tax Return – Form 4868.
  • Application for Extension of Time to File U.S. Income Tax Return (taxpayers who live abroad and expect to qualify for special tax treatment) – Form 2350.
  • Application for Extension of Time to File a Return and/or Pay U.S. Estate Taxes – Form 4768.
  • Application for Extension of Time to File Certain Employee Plan Returns – Form 5558.
  • Application for Extension of Time to File Information Returns – Form 8809.
  • Application for Extension of Time to File an Exempt Organization Return – Form 8868.
  • Application for Extension of Time to File Form 709 and/or Payment of Gift/Generation Skipping Transfer Tax – Form 8892.
  • Application for Extension of Time to File Certain Business Income Tax, Information, and Other Returns – Form 7004.
  • Extension of Time for Payment of Taxes by a Corporation Expecting a Net Operating Loss Carryback – Form 1138.

Important consideration when filing for extension to file tax returns

What taxpayers often misinterpret is the fact that an extension, if granted, merely gives you a right to submit documents to the IRS at a later date. It does not relieve you from the requirement to pay your obligations.

When you file for extension, you should also estimate your tax liability. If your calculations show that you don’t owe anything to Uncle Sam, you just have to worry about getting your tax returns done before the extension expires. If you do owe money to the government, make sure you make a payment even if you submit the complete documents later. One reason for that is that failing to make a payment triggers a late payment penalty. Additionally, any unpaid portion of your liability is a subject to interest for the difference between what you owe and what you pay on April 15. Even if your initial estimate is incorrect at least you are not charged interest on the full amount of your liability. So the less you owe, the less you will pay in interest.

 

 

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