Autumn is upon us, and if you chose to file a tax extension this year, October 15 is your target date…your zero hour…your deadline. Your six-month grace period is coming to an end.
If it feels as though the past few months have flown by, don’t fret, there is still time to submit your tax return without incurring any additional penalties or interest. We’ve compiled a short list of last-minute tax tips for you extension filers needing to get your returns filed with the IRS by October 15th 2016.
Tax extensions allow taxpayers who are unable to complete their taxes by the filing deadline to instead file for an extension with the IRS, giving them an extra six months to complete their tax returns for the previous year.
What do those who are coming up on the tax-extension deadline need to keep in mind?
Here are a few last-minute tips:
- Tax extensions extend your filing deadline, not your paying deadline.
A common misconception about tax extensions is that they allow a person to avoid paying taxes for an additional six months. In reality, the extension only gives an individual more time to file a return; taxes that may be due at the time of filing for the extension must still be paid at the time of filing the extension. If you failed to pay estimated taxes you may owe interest and penalties on taxes that were unpaid.
- What if you still aren’t ready to file on October 15?
Except under limited circumstances to members of the military or U.S. citizens living abroad, the IRS generally does not offer additional extensions past the six-month extension. Failing to file your taxes by the extended deadline will cause you to incur late-filing penalties in addition to the amount of taxes owed.
- What if you can’t pay what you owe?
If you’ve filed a return and determined that you owe less than $50,000 in taxes, you can file an installment agreement request. Along with a one-time installment fee, if your request is granted you will be able to pay off your tax bill in monthly installments.
- Funding Your IRAs
October 15th is also the final deadline to fund your SEP-IRA if you requested an automatic extension. If you’ve forgotten about this little deadline, you still have time to make some deposits. Just remember to update your tax paperwork after you’ve funded these accounts.