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Tax extensions are common, especially for tax year 2022. If you file the proper forms, you could get about six more months to file your tax return. However, there are some specific rules and requirements that you need to be aware of, especially if you want to avoid the possibility of a penalty.
Read on to learn what a tax extension means, how to get one, and how to use this extended tax deadline to your advantage.
What is a tax extension?
A tax extension is an extension of time with the Internal Revenue Service (IRS) to file your federal tax return. Basically, it means that you don’t have to complete your federal tax return before the usual due date, which is usually April 15 (unless this date falls on a weekend or holiday).
Here’s what taxpayers can ask about tax extensions:
Who is eligible?
In general, anyone, regardless of income level, is eligible to apply for a tax extension. This includes resident and non-resident aliens. Your request is for an automatic tax extension extension and you don’t even need to justify your reasoning. All you have to do is fill out and submit the correct IRS form based on your filing status. Just make sure you’ve done this before the usual expiration date, which is usually April 15.
What is the new tax deadline?
Generally, a tax extension is good for six months. This means that your new tax deadline would come around October 15. If October 15 falls on a weekend or legal holiday, the date is pushed back to the next business day. For fiscal year 2023, the extension deadline is October 16, 2023.
Under special circumstances, this date may be slightly different. For example, if you are a U.S. citizen or resident alien living or stationed outside the country, you are allowed one two month automatic extension the usual expiration date. That puts the automatic 2-month tax deadline at June 15.
You can also get an automatic extension if you are in a disaster area. This depends on the decisions of agencies such as the Federal Emergency Management Agency (FEMA).
Is my payment also extended?
It is critical to note that a tax extension applies to filing your return, No your payment if you owe taxes. That means your estimated tax is still due on the regular due date. It is your responsibility to estimate your tax liability and pay on time; If you don’t, you may incur a penalty and have to pay interest on your original tax bill.
Do extensions apply to all income tax returns?
Some states accept the IRS tax extension rules, while others require you to file a separate state extension application. That means a tax extension can only apply to your federal return.
Can I get another extension?
In most cases, you can only get one extension per return. Essentially, if your date extends into October, you can’t ask the IRS to give you even more time.
Can the IRS reject my extension?
Although the IRS does not reject many extensions, it is possible that your extension request will be rejected. Most of the time, this is just due to incorrect information or typos, and the IRS gives you five days to straighten things out and resubmit your form that was electronically filed on time but then rejected.
Should I use a tax extension?
There are many good reasons to use a tax extension, and they don’t come with any “punishment.” They are even free to file.
For example, you won’t have to pay more on your taxes for filing late if you use a federal extension, and in fact, you could avoid a late-filing penalty that you would otherwise have incurred. Plus, if a little more time makes it easier to claim the right tax credits or make sure you’ve covered all your bases, there’s no reason to pass up this valuable opportunity.
How to get a tax return extension
Once you know how tax extensions work, what the rules are, and how you can benefit, it’s time to get started. Here’s what you need to know about applying for your extension:
Planning your extension
Remember that the due date for extension requests is your regular due date, usually April 15. Because this date is fairly consistent every year, you should have plenty of time to plan ahead and decide if you need an extension. For example, if you’ll be out of town right around the time your return is due, it might be easier to request an extension.
Find your form
If you are an individual, you need IRS Form 4868. This also applies to those who are married filing a joint return. If you are filing taxes for your business, you will need Form 7004.
There are special circumstances in which you may need different documentation. For example, if you need an extension for estate taxes, you may need Form 4768. All of these forms and more, plus detailed explanations of when to use them, are available on the IRS website.
Presentation of your form
You can apply for a tax extension the same way you would file your tax return. Many people use tax software, but in some cases, you may choose to print a form and mail it to the IRS. If that’s your plan, allow yourself plenty of time for any postal delays and be sure to get proof of when and how you submitted the form.
Once you’ve applied for your extension, your only job is to wait. If the IRS doesn’t send a denial notice, you’re good to go.
How to use a tax extension to your advantage
Let’s say you did everything correctly and your extension is finished. How can you ensure that you use this opportunity wisely?
Check out these last-minute tax tips to help you make the most of your extension:
#1: Double check basic information
The IRS automatically corrects certain errors and notifies you of others. While this is not necessarily a cause for concern, can extend the process and delay any potential refund. Since you have this extra time anyway, it makes sense to check the information you include:
- Your current address.
- Your Social Security Number or Taxpayer Identification Number.
- Your marital status.
- Your income.
Easily import your W-2 from thousands of partners when you file with TurboTax to save time and ensure accuracy when filing your taxes.
#2: Get organized
If you requested an extension because you felt you needed more time to gather all the documents, forms, and tasks you need to do, this is a great opportunity to create a “tax plan.” You can use this plan to file this year, but it can also grow and change for future tax years to help you keep up as your financial needs change. Here are some ideas to get started:
- Keep records of expenses, especially receipts.
- Keep forms of the same type together.
- Scan paper documents to organize them electronically.
- Store receipts for payments or tax returns.
- Create checklists to collect documents, complete steps, and submit returns.
- Bookmark helpful IRS pages, blog posts, and your favorite tax software or solution.
#3: Review tax deductions and credits
You may be eligible for a tax credit or deduction you’ve never heard of. Although TurboTax automatically searches a database of options to see what applies to your particular situation, now is a good time to learn what those deductions and credits look like. That way, you can make financial decisions that can later reduce your tax liability.
For example, maybe you are thinking of buying a new car. If you know about him Clean Vehicle Tax Creditwhich can cost up to $7,500, you’ll have the details you need to shop for a make and model that could benefit you in the future.
#4: Find Live Help
You have many options when it comes to filing your taxes. An extension gives you a chance to revisit these options and figure out what works best for you, and next year you’ll know exactly where to start.
One path to consider is to get live help with a solution like TurboTax Live Assisted Basic. You’ll get advice every step of the way, plus an expert review at the end to make sure everything looks right. This not only helps you stay on track to file your return before the extended due date; gives you more information about tax planning, which you can use to improve your approach next year.
#5: Learn what you can
Now that you have your tax extension, there’s no need to rush. Ask all your questions, read each form carefully, and learn what income tax really means for your financial situation. This can also be a learning opportunity for the future:
- Starting a small business? Take advantage of the opportunity to know how your next tax return will be different.
- Quitting your job to be a contractor? Use this extra time to compare your current tax situation with self-employment tax rates and costs.
- Have children? In addition to being dependents who can help reduce your total income tax payment, children can be apprentices. Show them how you file your taxes to build their financial literacy.
Take advantage of your tax extension with TurboTax
Taxes can be challenging no matter your due date. If you want to make the most of your extra time, answer any questions, and make sure your tax return is done right, turn to TurboTax for the expert guidance you deserve.
we will do your taxes
and find every dollar
You deserve it
When your full-service expert does your taxes,
they will only sign and file when they know it is 100% correct
and you will get the best possible result, guaranteed.
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