So filers, how are you keeping today? With a new day and a long week ahead, we are starting with a blog post for ExtensionTax.com. Today’s topic is form 4868 and the consequences faced for filing a late extension.
As you know, the due date for filing an extension for form 4868 is April 15th of the calendar year, and you get 6 months of extension time to file your return. Your return would not be counted late as long as you submit your income tax papers by October 15th. However, do note, you are liable to pay your dues by the due date. The extension of time is only to get your papers in place, not for the dues you owe.
What is Form 4868?
Form 4868 is an application for Automatic Extension of Time to File U.S. Individual Income Tax Return. Through this form, individuals filing income tax return can ask for 6 months of extension of filing date of your income tax return. In addition, it is mandatory to pay 90% of the dues you owe while requesting for a new extension. There is no notification sent across for the acceptance of the extension, however, if your payment is due or not appropriate as per the IRS books, your income tax extension would be rejected and you will be informed.
If you are wondering if IRS can grant extensions beyond the extended due date, the answer is NO. IRS usually does not entertain such requests and it is mandate to file your income tax return by the end of the extended due date. However, there are exceptions for certain cases like for individuals serving in a combat zone, living outside of the United States or the taxpayer or paid preparer having a serious illness, otherwise late filing penalties start accumulating when the six-month extension expires, even if you already paid the taxes due.
Penalties For Filing Late:
If there is a scenario when you are filing your return after the extended due date, you’re liable to file your return with penalties. The penalty is usually 5% of the amount due for each month or part of a month, your return is late. The maximum penalty applicable is 25%. However, if your return is late for more than 60 days, the minimum penalty is $135 or the balance of the tax due on your return, whichever is smaller.
Penalty for Late Payment:
According to IRS, the late payment penalty is ½ of 1% of any tax (other than estimated tax) will be charged if the tax is not paid by April 15, 2014. This applies to each month or part of the month the tax is unpaid. Do note the maximum penalty applicable is 25%. However, this late payment penalty would not be applicable to you if you show up a reasonable cause for not paying on time.
Do not attach the statement of form 4868. You should have a considerable reason for the period covered by this automatic extension if at least 90% of your actual 2013 tax liability is paid before the regular due date of your return through withholding, estimated tax payments, or payments made with Form 4868.
Applicable Interest:
It is mandatory to pay your dues by the due date if you are qualified for automatic 2 months extension because you were outside the country. The interest would run until you pay your dues. No good reasons work and you need to pay the interest on your dues.
When it comes to tax, IRS doesn’t entertain excuses. Therefore, it is better to file it on time and oblige IRS even before the due date slips out of our hand.
If you are filing your return and paying your dues online, ExtensionTax.com is the best portals to file your extension online with ease. You need to enter the estimated tax and pay your dues. Enjoy the simplest and user-friendly application available for your perusal at ExtensionTax.com.
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