IRS 1040 EXTENSION BASICS

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EXTENSION BASICS

2022 Tax Return

Common Reasons to File an Extension

•       Haven’t received all of your tax documents
•       Don’t want to feel rushed
•        Still need to organize your business expenses
•        Unexpected life, Shxt Happens

Purpose of Extension

To obtain additional time to file your tax return (the forms only!) It is NOT AN EXTENSION OF TIME TO PAY WHAT YOU OWE!

The normal due date to file your individual 1040 income tax return this year is April, 18. The automatic extension gives you an additional 6 months, making the due date October 17.  If the 15 falls on a Saturday, Sunday or Holiday, the due date will be the next business day.

Note

If you are out of country or in the Military different rules may apply to you.

Natural disasters and federally declared disaster areas may have due dates extended by the IRS or your State

IRS: May 15 tax deadline extended to Oct. 16 for disaster area taxpayers in California, Alabama and Georgia

IR-2023-33, Feb. 24, 2023 — Disaster-area taxpayers in most of California and parts of Alabama and Georgia now have until Oct. 16, 2023, to file various federal individual and business tax returns and make tax payments, the Internal Revenue Service announced today. Previously, the deadline had been postponed to May 15 for these areas.

Check with your local state tax department for extended deadlines to file.

An extension of time to file your return does not grant you any extension of time to pay your taxes.

You should estimate and pay any owed taxes by your regular deadline to help avoid possible penalties.

You must file your extension request no later than the regular due date of your return.

Qualifying for the Individual Extension

To get the extra time you must:

1. Properly estimate your 2022 tax liability using the information available to you,
2. Enter your total tax liability on line 4 of Form 4868, and
3. File the Form 4868 by the regular due date of your return. This year April 18
4. Even if you don’t owe, if you are planning on filing after the due date we suggest you still file an extension in the event you end up owing at some future date
5. If you owe but can’t make a payment with the extension you should still file the extension to cut down the penalties that will be assessed. File the extension with no payment.

Normally if you do not file an extension and you owe taxes you will be assessed

Failure to file penalty,

Failure to pay penalty, and

Interest.

If you do NOT owe taxes, you will not owe failure to file penalty, failure to pay penalty or interest.

 Methods to file a Federal Extension

You can also get an extension by paying all or part of your estimated income tax due and indicate that the payment is for an extension using Direct Pay, the Electronic Federal Tax Payment System (EFTPS), or a credit or debit card. This way you won’t have to file a separate extension form and you will receive a confirmation number for your records.

You can also mail in the extension by Completing form 4868 and making a payment if you owe taxes. If you owe no tax just mail in the completed form.

E-file Your Extension Form for Free

Individual tax filers, regardless of income, can use Free File to electronically request an automatic tax-filing extension.

Contact your accountant or tax preparer to help you file an extension.

Computer program

If you will be using one of the online or computer based programs, you can file an extension using your software.

You can obtain extension information directly from the IRS website

https://www.irs.gov/forms-pubs/extension-of-time-to-file-your-tax-return

State Extension

CONSULT YOUR LOCAL TAXING AUTHORITY 

The information is being provided for reference purposes only and you should always consult your own Tax, Legal or Financial advisor.

POSSIBLE PENALTIES

1040 Late Payment Penalty

The late payment penalty is usually 1⁄2 of 1% of any tax (other than estimated tax) not paid by the regular due date of your return, which is April 18, 2023. It’s charged for each month or part of a month the tax is unpaid. The maximum penalty is 25%.

The late payment penalty won’t be charged if you can show reasonable cause for not paying on time. Attach a statement to your return fully explaining the reason. Don’t attach the statement to Form 4868.

You’re considered to have reasonable cause for the period covered by this automatic extension if both of the following requirements have been met.

1. At least 90% of the total tax on your 2022 return is paid on or before the regular due date of your return through withholding, estimated tax payments, or payments made with Form 4868.
2. The remaining balance is paid with your return.

1040 Late Filing Penalty

A late filing penalty is usually charged if your return is filed after the due date (including extensions). The penalty is usually 5% of the amount due for each month or part of a month your return is late. The maximum penalty is 25%. If your return is more than 60 days late, the minimum penalty is $450 (adjusted for inflation) or the balance of the tax due on your return, whichever is smaller. You might not owe the penalty if you have a reasonable explanation for filing late. Attach a statement to your return fully explaining your reason for filing late. Don’t attach the statement to Form 4868.