Tax Deadline Panic Cure
File this automatic extension form by midnight April 17 and your problems are over—until October 15, by which date you must file a tax return. The late-filing penalty is 5% per month of any unpaid tax balance. Ouch! If you don’t pay on time, you’re subject to a late-paying penalty of 0.5% per month. And you’d owe interest too: 3% per year, compounded daily.
If you’re thinking of filing an automatic extension or don’t have the money to pay your taxes right now, some thoughts:
- Form 4868 extends the time you have to file, but not to pay. To avoid potential penalties, you must send in by midnight April 17 your best estimate of what you owe Uncle Sam. Guess high.
- You can easily file for an automatic extension through the IRS’ Free File service.
- If you cannot afford to pay what you owe, check into the IRS’ Fresh Start initiative. See the video at the bottom of this post to learn more about payment relief for which you may qualify.