The Internal Revenue Service reminds taxpayers who may have trouble meeting the April 17 tax filing deadline that a six-month filing extension is available, but you must request an extension by April 17.
A filing extension allows taxpayers until Oct. 15 to gather, prepare and file their taxes with the IRS. However, it does not extend the time to pay any tax due. Payments are still due by the original deadline. Taxpayers should file even if they canâ€™t pay the full amount. By filing either a regular return or requesting an extension by the April 17 filing deadline, they will avoid the late-filing penalty, which can be 10 times as costly as the penalty for not paying.
Taxpayers who pay as much as they can by the due date reduce the overall amount subject to penalty and interest charges. The interest rate is currently 5% per year, compounded daily. The late-filing penalty is typically 5% per month and the late-payment penalty is normally 0.5 percent per month.
Applying for an extension requires answering a few questions on Form 4868. Part I of the form asks personal information such as name, address and Social Security number. Part II is tax related and asks about estimated tax liability, payments and residency. Or, you can request an extension through your tax preparer.
Please contact your REDW tax professional to discuss whether an extension is right for you, or you may contact Jimmy Trujillo in New Mexico and Sandy Abalos in Arizona to inquire about our tax services.