Monday is Tax Day. If you're not ready, there's an out
A recent survey by tax preparation company TaxAct found that 47% of respondents put off filing their taxes longer than they needed to. Credit: Getty Images / Nora Carol Photography
Tick tock, folks. Monday is Tax Day.
If you haven't filed your income taxes yet, you’re not alone. Many Americans drag their feet this time of year: A recent survey by tax preparation company TaxAct found that 58% of respondents described their taxes as a source of personal stress, and 47% put off filing longer than they needed to.
Tax experts said last-minute filers should focus on what it will take to extend the deadline. This is a common request — about 12% of taxpayers asked for an extension in 2022, according to the latest Internal Revenue Service figures — and it can be done by filling out and mailing IRS Form 4868.
But there’s a catch: While the IRS will grant you a six-month extension, you do not get to postpone your tax payment.
Late filers must send the IRS an estimate of how much they expect to pay in taxes. If their estimate is off by more than 10% of what they end up owing, it’s possible they’ll get hit with interest charges and other penalties.
Other than that, extensions are very common and relatively easy to file, said Erika Calderon, managing principal at Brinster & Bergman accounting firm in Rockville Centre.
“There’s nothing wrong with filing an extension,” Calderon said. “A lot of people have this misconception that it’s a red flag, it’s an audit flag. There is no truth to that at all.”
If you’re considering a tax extension, here’s what to know:
Take a hard look at your tax forms and documents and figure out what you have, and what you don’t, to file your taxes. If you’ve misplaced or lost some forms, you’ll want to try to locate them online.
Once you’ve compiled everything, ask yourself: Do you have a good idea of what you owe? If you don’t, Calderon said it would be a good idea to come up with your best estimate based on your current financial situation and what you’ve typically paid in the past.
On the other hand, if you're expecting a refund, and you're fairly close to finishing your return, it would make sense to press ahead and file. The IRS doesn't pay you interest for what it owes you.
The IRS accepts Form 4868 in a number of formats:
Snail mail: You can download the form, print it, fill it out and mail it to the IRS, If it’s stamped with a Monday postmark, you should be fine, E-file: There are a variety of tax preparation services that will allow you to send your form electronically for free, You can get a list of these services by typing “file form 4868 for free” in your online search engine, You also can access these e-file services through the , [object Object], page, Use an accountant: Finding an accountant the day before Tax Day is a bit like bothering Santa Claus on Christmas Eve — they’re swamped, That said, some accountants will still meet with you, They likely will not be able to file your return on time, but they can guide you through the extension process,.
The government’s new Direct File service is not equipped for filing an extension. However, it will remain open on Monday for those who qualify and want to use Direct File to file their return.
Also, note that if you're planning to file an extension, New York residents also will need to file a separate extension request with state tax authorities.
The IRS requires taxpayers who extend their deadlines to pay at least 90% of what is owed by April 15. If your estimate falls short of that limit, you could be hit with penalties.
That said, the government may decide to go easy on you if you can explain to them what went into your estimate, and why it was so far off.
“Usually you can write a letter and explain the situation and ask for reasonable cause to have the penalties waived,” Calderon said.
The IRS offers payment plans to taxpayers who do not have enough cash on hand to pay what is due.
If you’re in this situation, and plan to file an extension, Calderon said you should try to pay what you can now and then file your taxes as soon as possible.
“They’ll work with you,” she said. “The IRS isn’t looking to bankrupt people. They are a reasonable entity to work with.”
Tick tock, folks. Monday is Tax Day.
If you haven't filed your income taxes yet, you’re not alone. Many Americans drag their feet this time of year: A recent survey by tax preparation company TaxAct found that 58% of respondents described their taxes as a source of personal stress, and 47% put off filing longer than they needed to.
Tax experts said last-minute filers should focus on what it will take to extend the deadline. This is a common request — about 12% of taxpayers asked for an extension in 2022, according to the latest Internal Revenue Service figures — and it can be done by filling out and mailing IRS Form 4868.
But there’s a catch: While the IRS will grant you a six-month extension, you do not get to postpone your tax payment.
WHAT TO KNOW
- If you file an extension, you still need to pay your estimated taxes by Monday.
- You can file the IRS extension form several ways, including through its Free File service.
- The IRS offers payment plans for those who don't have enough cash on hand to pay their taxes.
Late filers must send the IRS an estimate of how much they expect to pay in taxes. If their estimate is off by more than 10% of what they end up owing, it’s possible they’ll get hit with interest charges and other penalties.
Other than that, extensions are very common and relatively easy to file, said Erika Calderon, managing principal at Brinster & Bergman accounting firm in Rockville Centre.
“There’s nothing wrong with filing an extension,” Calderon said. “A lot of people have this misconception that it’s a red flag, it’s an audit flag. There is no truth to that at all.”
If you’re considering a tax extension, here’s what to know:
What should I do right now?
Take a hard look at your tax forms and documents and figure out what you have, and what you don’t, to file your taxes. If you’ve misplaced or lost some forms, you’ll want to try to locate them online.
Once you’ve compiled everything, ask yourself: Do you have a good idea of what you owe? If you don’t, Calderon said it would be a good idea to come up with your best estimate based on your current financial situation and what you’ve typically paid in the past.
On the other hand, if you're expecting a refund, and you're fairly close to finishing your return, it would make sense to press ahead and file. The IRS doesn't pay you interest for what it owes you.
How to file an extension
The IRS accepts Form 4868 in a number of formats:
- Snail mail: You can download the form, print it, fill it out and mail it to the IRS. If it’s stamped with a Monday postmark, you should be fine.
- E-file: There are a variety of tax preparation services that will allow you to send your form electronically for free. You can get a list of these services by typing “file form 4868 for free” in your online search engine. You also can access these e-file services through the IRS Free File page.
- Use an accountant: Finding an accountant the day before Tax Day is a bit like bothering Santa Claus on Christmas Eve — they’re swamped. That said, some accountants will still meet with you. They likely will not be able to file your return on time, but they can guide you through the extension process.
The government’s new Direct File service is not equipped for filing an extension. However, it will remain open on Monday for those who qualify and want to use Direct File to file their return.
Also, note that if you're planning to file an extension, New York residents also will need to file a separate extension request with state tax authorities.
What if I underestimate what I owe?
The IRS requires taxpayers who extend their deadlines to pay at least 90% of what is owed by April 15. If your estimate falls short of that limit, you could be hit with penalties.
That said, the government may decide to go easy on you if you can explain to them what went into your estimate, and why it was so far off.
“Usually you can write a letter and explain the situation and ask for reasonable cause to have the penalties waived,” Calderon said.
What if I don’t have enough money to pay right now?
The IRS offers payment plans to taxpayers who do not have enough cash on hand to pay what is due.
If you’re in this situation, and plan to file an extension, Calderon said you should try to pay what you can now and then file your taxes as soon as possible.
“They’ll work with you,” she said. “The IRS isn’t looking to bankrupt people. They are a reasonable entity to work with.”
Newsday Live Author Series: Bobby Flay Newsday Live and Long Island LitFest present a conversation with Emmy-winning host, professional chef, restaurateur and author Bobby Flay. Newsday food reporter and critic Erica Marcus hosts a discussion about the chef's life, four-decade career and new cookbook, "Bobby Flay: Chapter One."
Newsday Live Author Series: Bobby Flay Newsday Live and Long Island LitFest present a conversation with Emmy-winning host, professional chef, restaurateur and author Bobby Flay. Newsday food reporter and critic Erica Marcus hosts a discussion about the chef's life, four-decade career and new cookbook, "Bobby Flay: Chapter One."
