April 18 is the last day to file the tax returns for the citizens of the United States. Those who have failed to prepare their tax returns by this time can file the tax extensions. The last date to file the tax extensions is also April 18th, 2022. If you fail to complete your tax returns by April 18th and fail to file the tax extension, and if you owe the IRS, then the IRS would charge a 5% penalty for the taxes owed. Filing a business tax extension is only to offer more time to complete the tax return statements. Filing this extension doesn’t push back the time to pay the taxes with the IRS. To avoid penalties, it is better to pay the taxes in excess and avail refunds.
Ways to file tax extension:
The IRS estimates about 15 million taxpayers request a time extension to file their returns. Tax Payers can request an extension to file the returns using IRS Free File. Also, by filing IRS tax Form 4868, it is possible to apply for an automatic extension of Time till October 17th, 2022. This time extension to file the tax returns is not an extension of time to pay the taxes. The taxpayers should estimate their tax liability in the tax Form 4868 and pay the tax amount due by April 18th, which is the taxpaying deadline, to avoid all types of tax interests and penalties.
The taxpayers can also request more time by paying all or part of their estimated income tax due, and state that the payment is for the tax extension. They can do it using Direct Pay, EFTPS (Electronic Federal Tax Payment System), or using a digital wallet or debit/credit card. This way, they need not file a separate extension form and will receive the confirmation number for all their records.
What if the tax deadline is missed?
If businesses miss the tax deadline and if you owe a refund, there is no penalty for filing the tax returns late. It is always better to e-file or postmark the business tax returns as early as possible. There are chances for the interests and penalties to accrue on the unpaid taxes if the tax filing deadline is missed. The taxpayers can also incur a late payment penalty, which is 0.5% of the taxes due for every month the return is late. The penalty can increase up to 25% of the unpaid taxes, depending on how long it takes to file the tax Form.
The best way to file tax extensions is through IRS tax Form 4868. This is a one-page form that asks for basic information and a rough estimate of taxes that businesses owe to the IRS. Tax filing companies like Tax2efile will help in filing a tax extension and also to file tax returns. Filing the tax returns Form electronically will help the taxpayers get a refund, within 21 days, if there are no problems with the return.