As the last day to do taxes draws near, millions of Americans struggle about in a race to meet the deadline and avoid Uncle Sam’s costly penalties. However, some may wish to unload this tax day stress all together by applying for an automatic extension of time to file their taxes. But before you decide that this is the best route for you, it is best to get familiar with what’s myth and what’s fact when it comes to tax day extensions.
Not Everyone Needs to File by Tax Day
The April 15 tax day deadline doesn’t necessarily apply to everyone, in which case, filing for extension wouldn’t make sense at all to some. You are only required to file in time if you owe money in on your taxes. Those who are expecting a refund automatically have 3 years to file their taxes. Other situations that are not subject to the April 15 tax day deadline include U.S residents living abroad and Military Personnel, who have until June 15.
An Extension Does Not Give You Extra Time to Pay Your Taxes
Filing for an extension won’t keep money in your pocket any longer, if you were thinking of it as a way to pay your taxes later without incurring any penalties. A tax day extension only gives you more time to officially file your taxes. You are required to do a very simplified version of your taxes when you apply for an extension, so that you can get an estimate of how much tax you owe. If possible, the amount of the tax due should be sent with the extension form. If not, the IRS requests that you pay what you can, to lower the penalties you are charged until the full amount is paid.
So, Why do People ask for a Tax Extension?
For some, getting the taxes done by tax day is as simple as entering the info from your form W-2, but it gets far more complicated for many others. For instance, someone who gained income from several different sources, say, stocks, annuities, dividends, and more. And perhaps they also are going about the process of itemizing every single expense and deduction. Some tax returns are thick enough to be a novel, and in this case, plenty of time is needed to get everything together and make sure that it is completely accurate. Other common reasons for applying for an extension past tax day are things like lost W-2 forms or unexpected life events in general.
IRS, Extension of Time To File Tax Return