As tax season approaches, many Americans find themselves feeling unprepared to file their taxes. According to a recent survey, 1 in 4 Americans admit to not feeling ready, while a staggering 29% confess to procrastinating when it comes to filing their taxes. This can lead to a lot of stress and anxiety as the tax deadline looms closer.
Filing for a federal tax extension can be a quick and easy solution for those who need more time to gather all the necessary documents and information. Certified financial planner, Tommy Lucas, emphasizes that filing for an extension only takes a few minutes, providing individuals with an extra six months to file their taxes, pushing the deadline from April 15th to October 15th.
Failure to file for a tax extension can result in severe penalties. Without an extension, individuals may trigger the failure to file penalty, which can amount to 5% of the unpaid taxes per month, capped at 25%. It is crucial to remember that filing for an extension does not mean an extension to pay. Taxes owed are still due by the original deadline, and individuals can minimize penalties and interest by paying at least the “safe harbor amount”.
There are various options available for individuals to file a federal tax extension. One common method is completing Form 4868 and mailing it to the IRS. However, experts recommend opting for digital options whenever possible. Sending information digitally to the IRS is faster and more reliable than traditional mail. Another simple option is to select “extension” when making your estimated tax payment for the following year. This process automatically extends your filing deadline without the need for an additional form.
After submitting your estimated tax payment with an extension, it is essential to verify and confirm the transaction in your IRS online account. This step ensures that your extension has been processed correctly and that you have successfully extended your filing deadline. By double-checking the transaction, you can avoid any potential issues or misunderstandings with the IRS.
Filing for a tax extension provides individuals with the necessary time and flexibility to file their taxes accurately and avoid penalties. It is a simple process that can save you from unnecessary stress and anxiety during tax season. By taking advantage of the options available for filing a federal tax extension, individuals can ensure a smooth and hassle-free tax filing experience.