This tax season has been swamped with one situation after another.
Countless taxpayers may be stressed out with taking care of their families, working from home (if they’re able to), and trying to adjust to their daily lives. With filing a tax return being the last thing on their mind, the July 15 deadline came as fast as it left.
If you find yourself worrying about needing extra time to file, don’t worry, we’re here to help.
Filing a tax extension
The last day to request a tax extension was July 15, 2020. You can no longer request a tax extension from the IRS.
However, the good news is, you can still file until October 15, 2020, in order to electronically file your tax return. After the tax extension deadline, you must paper-file your return.
What if I owe taxes to the IRS?
As a reminder, regardless of filing an extension, it does not grant you extra time to pay the IRS. It only applies to filing your tax return. You must estimate and pay your taxes by the original tax deadline.
In the case that you owe taxes to the IRS, you are looking at the failure-to-pay penalty. This penalty is 0.5% of your tax due per month until you fully pay or up until 25% of your taxes. The failure-to-file penalty is 5% of your unpaid tax per month for up to 5 months.
For example, if you owe $1000 to the IRS, you will be looking at $5 monthly to your tax liability. With the failure-to-file penalty, the monthly penalty is $50. The IRS combines both penalties for up to 25% of your tax liability. This does not include interest.
What if I’m due a refund from the IRS?
Rest assured, you will not face penalties if you file after the tax deadline. On the other hand, file by the e-file and tax extension deadline, October 15, 2020 to e-file your taxes. In order to meet the three year statute of limitations to claim your tax refund, file before April 15, 2023.
(You can also still claim tax refunds for 2017 and 2018.
Start on your taxes now
Prepare before the e-file and extension deadline gets here. All you need to do is create an account with us, enter your tax information, and submit your account to us for e-file. You can even request an installment agreement to the IRS if you have a tax liability through our services.
Our tax experts are here to help you get your taxes done on time!