It’s free to request an automatic six-month tax filing extension, but you may be charged late payment penalties and interest until you pay your full tax liability for the year. However, you will avoid the failure-to-file penalty if you request an extension and file your return within the next six months.
Whether getting a filing extension is your best option will depend on your reason for not filing your return on time and other factors.
No Time to File
Every year, some taxpayers wait until April 15th to start working on their tax returns. They often find that they’re missing a form, their tax preparer is fully booked, or some other issue will prevent them from filing their tax return on time.
If this is you, getting a filing extension is your best option because you’ll avoid the failure-to-file penalty. You can file your return whenever you’re ready, as long as you file by October 15th. Penalties and interest will be charged if you owe taxes for the year, which you can minimize by sending in a payment with your extension form.
Next year, you may want to start on your tax return in February.
Can’t Afford Your Tax Bill
Other taxpayers request a filing extension because they owe taxes and can’t afford to pay their bill. Late payment penalties and interest will keep accruing until you pay your total tax liability for the year.
You can avoid late penalties if you’ve already paid at least 90% of your taxes for the year through withholding or estimated tax payments. If you’re a little short of this amount, you can make up the difference by sending a payment with your extension form. You’ll still be charged interest, and you’ll only avoid penalties if you pay the remaining balance within six months with your return.
If you fell behind on your estimated tax payments or owe taxes for multiple years, you should start considering your tax resolution options. You’ll need to have all your returns filed before you work out a payment plan or another arrangement.
A tax attorney can review your case and help you find a solution that fits your budget. You can discuss negotiating an installment agreement or using another tax relief program during an initial consultation.
The Gartzman Law Firm offers delinquent tax return preparation and tax settlement help for both federal and state tax debt. Use our contact form to request a consultation with an Atlanta tax resolution attorney.