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I understand there is 5% penalty AND interest paid on tax…

I understand there is 5%...
I understand there is 5% penalty AND interest paid on tax owed if the return is late (after 4/15). Do I avoid the penalty by filing the 'extension' (or whatever it's referred to as), but still pay the interest on any taxes due and upaid? Thx! :)
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Answered in 16 minutes by:
4/13/2018
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,311
Experience: Taxes, Immigration, Labor Relations
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If you file for extension - you will have time till Oct 15 to file - and will avoid the failure-to-file penalty if you will file by THAT date.

HOWEVER that is an extension to file and NOT extension to pay...

We need to be very careful.

If you do not PAY before the due date - which is Apr 18 in this year - you still will be subject to failure-to-pay penalty - that is a different penalty of ½ of 1 percent of your unpaid taxes. That penalty applies for each month or part of a month after the due date and starts accruing the day after the tax-filing due date.

As we see - the failure-to-pay penalty is much smaller than the failure-to-file penalty.

So you might really benefit if you timely file the extension request.

.

Moreover ...

If you timely requested an extension of time to file your individual income tax return and paid at least 90 percent of the taxes you owe with your request, you may not face a failure-to-pay penalty.

However, you must pay any remaining balance by the extended due date.

.

In any case - you still will be charged the interest on any unpaid balance after the due date.

Questions?

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Customer reply replied 4 months ago
I have to say that was clear and concise, not the convoluted run around you get from those who don't have a firm grasp of the subject. Thanks soooo much :) It's so clear why wouldn't anyone get it. I don't have money. It's a new start up. If I don't include a partial payment, will they reject the request for extension? Do I need to include a letter of explanation or maybe a different form?

The IRS will NOT reject request for expansion - and I suggest to file it - you still have time - and you will have some additional time to prepare your tax return.

Issues with tax liability are handled separately.

No need to provide any explanation at this point.

Just try to pay as much as you could to minimize additional charges.

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Customer reply replied 4 months ago
okay. when you said expansion I am presuming you meant extension. so, I just need to file the extension and even without payment they will grant it... Guaranteed? can you point me to a resource or give me detailed, step by step instructions how to fill out the extension request form? I also need the form number itself. Thank you very much. mark

yes - sorry for typo - that meant extension

That is not required - in some situations may be very helpful.

The payment is NOT required with the extension request.

The form is here

https://www.irs.gov/pub/irs-pdf/f4868.pdf

According to instructions

There are three ways to request an automatic extension of time to file a U.S. individual income tax return.
1. You can pay all or part of your estimated income tax due and indicate that the payment is for an extension using Direct Pay, the Electronic Federal Tax Payment System, or using a credit or debit card.
2. You can file Form 4868 electronically by accessing IRS e-file using your home computer or by using a tax professional who uses e-file.
3. You can file a paper Form 4868 and enclose payment of your estimate of tax due
.

Instructions are on this form.

Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,311
Experience: Taxes, Immigration, Labor Relations
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Lev and 87 other Tax Specialists are ready to help you
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Customer reply replied 4 months ago
I notice by making a partial pmt of my estimated tax, I don't even need to e-file or paper file. Can you please provide a link where I can make this payment?
Customer reply replied 4 months ago
Also, I did not work 2016 and only half of 2017 with a new biz startup. It states I need info from 2016 return in order to file electronically. This is for taxpayer verification, it says. What is an alternative to avoid needing verification? I just as soon not raise a red flag about 2016. Should I make a partial pmt in order to circumvent this form altogether?

Yes - you may make payment for ANY amount - ever $1 - as extension and that will serve as application for extension.

That is done via Direct Pay.

https://www.irs.gov/payments/direct-pay

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