The Internal Revenue Service grants six-month extensions to file tax returns with no questions asked. This is welcome news when April 15 is fast approaching and you realize you won’t have your tax return ready. Requesting an extension before April 15 won’t incur a penalty. However, you still may face penalties for late payment of taxes.
Avoid the Penalty
There’s no urgency to filing on time if you are due a refund, because there isn’t any penalty for sending your tax return in late. If you owe the IRS money, however, filing even one day late will earn you a penalty of 5 percent of the amount due. The 5 percent is charged each month or partial month, up to a maximum of 25 percent.
Taxes Still Due
You automatically get a six-month extension by submitting IRS Form 4868 by April 15. After that, it’s too late to ask for an extension. The extension gets you off the hook for the late filing penalty, but you may still be hit with a late payment penalty and interest on the taxes owed. The IRS says to estimate how much you owe and send payment with the extension request. Your payment will eliminate -- or at least reduce -- late payment charges.
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