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How to Extend Tax Return Last Minute

You can extend tax return deadline if you're running out of time.If you can’t file a tax return by April 17, 2018—the due date for 2017 returns given that April 15 falls on a Sunday and April 16 is a holiday in Washington DC—you want to extend your tax return.

That extension gives you more time to file your return without penalties.

And that’s important. The penalty for not filing or extending a tax return by April 17, 2018 equals five percent of the tax you will owe on April 17, 2018.

For example, if you owe $10,000 in income taxes for 2017 and you don’t file or extend by April 17, the IRS penalty levied on April 18, 2018 equals $500. (That five percent per month penalty continues for another four months, too. Ouch.)

How to Extend Tax Return with Direct Pay

You can extend a tax return in a variety of ways. The easiest way when you need to make a payment, though, is to use the Internal Revenue Service Direct Pay tool.

To use this service, click the link below:

https://directpay.irs.gov/directpay/payment?execution=e1s1

Then indicate you want to make a payment so you can extend the due date for a 1040, 1040A or 1040EZ return. Also indicate you’re making the extension payment for 2017.

The Figure below shows a fragment of the webpage and how it should look.

Extend tax return easily using the IRS's direct pay tool

When you click continue, the www.irs.gov website displays another window that, to confirm your identity, asks for your name, social security number, and birth date and then also your filing status and address for a specific year. (Probably you’ll use the filing status and address for the 2016 tax return.)

When you click continue again, the Internal Revenue Service website displays another window that asks for the amount you want to pay and for your bank account information.

You enter this information and then an “electronic signature” by typing your name again and then click Submit.

Once you click Submit? Boom. Your extension is filed, and your payment is made.

How to Extend with 4868

As an alternative to extending with Direct Pay, you can also extend using a paper 4868 form, available at the link below:

https://www.irs.gov/pub/irs-pdf/f4868.pdf

To extend with the 4868, fill in the form with your name and social security as well as your spouse’s name and social security number if you’re married.

Then mail the form to the IRS processing center for your location. (The form instructions, available with the form via the link just provided, list the IRS processing centers that taxpayers in different states use.)

Tip: Be sure the extension is mailed and postmarked on or before April 17.

Tax Return Extension Payment Amount

Extending a tax return gives you more time to file your return. But you are still supposed to pay the taxes you owe by (in 2018) April 17.

The right way to come up with the tax liability you still owe? Do your return, using estimates for any income or deduction amounts you don’t yet know for certain.

You can also, often, guess and get pretty close. If last year you paid, for example, $4,000 with your tax return and your income and deductions this year look like last year’s income and deductions, last year’s payment probably works for this year’s payment.

The other approach people use—let’s just be honest—is paying not what you owe but what you can afford to pay. If you think you owe, say, $10,000 but can only pay $3,000, you pay the $3,000 you can afford.

Note: If you don’t pay all of your 2017 tax liability by April 17, 2018, you will get changed what amounts to interest on your underpayment through a complicated formula I won’t detail here.

Extend Tax Return Without Making a Payment

If you want to extend your tax return but won’t make a payment, you should use the Form 4868 and indicate on that form that you think you owe zero additional tax liability.

If it turns out you owe something and not zero, you will pay interest on the underpayment. But not at that punitive five percent per month rate mentioned earlier.

The post How to Extend Tax Return Last Minute appeared first on Evergreen Small Business.

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About Carol St. Amand

Carol St. Amand

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