The IRS has made clear it's not extending the tax filing deadline past July 15. But if you still need more time to get your return in, filing for an extension is quick and straightforward.
As in previous years, filing for an extension gives taxpayers until October 15 to get their tax return in.
You can file an extension via commercial tax software, IRS Free File or even by physically mailing in Form 4868. The IRS strongly encourages people to file electronically, and offers a number of ways to do so via its website. If you typically use a tax preparer to file your returns, your preparer can also file an extension on your behalf.
Once you've requested an extension from the feds, check if you need to do so for your state. According to the IRS, "State filing and payment deadlines vary and are not always the same as the Federal filing and payment deadline."
Some states will automatically give you an extension on your state taxes if you receive a federal extension. In other states, you'll need to request an extension separately. The Federation of Tax Administrators offers a rundown of how to check for the information of the state you live in.
If you live in one of the seven states without personal income tax, you're likely in the clear.
Extending doesn't give you additional time to pay your taxes. "The extension only gives you additional time to file, it does not give you additional time to pay," the IRS says.
If you owe money come July 16, you'll start accruing penalties and interest on it.
"If you owe taxes, you can file an extension, no worries, but be prepared to come up with a pretty reasonable estimate of what you owe and be prepared to pay that," said Lynn Ballou, a certified financial planner and regional director at EP Wealth Advisers in California.
If you didn't owe money last year and your income hasn't changed a great deal, it's unlikely you'll owe money this year. To make sure you're in the clear, Jonathan Medows, a CPA based in New York, recommends going down a mental checklist.
"I'd ask myself the following questions: Did I earn any income that I didn't have taxes withheld? Did I do any freelance work?" he said."Did I have any unearned income, interest, dividends and capital gains? If I did and I didn't pay estimated tax over the course of the year, there's a good likelihood I may owe money."
First published on July 2, 2020 / 5:49 PM
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