For Our Valued Clients: Individuals and Small Businesses
As we approach another tax season, it's crucial to understand the options available, especially when more time is needed to file tax returns accurately. This article is designed to demystify the process of filing a tax extension for individual returns, with a focus on filing 2023 tax returns.
Understanding Tax Extensions
A tax extension grants you extra time to file your tax return with the IRS. It's important to remember, however, that this extension is for filing, not for paying any taxes you owe. To avoid penalties and interest, you should estimate and pay your tax liability by the original due date.
Eligibility for Filing an Extension
Any taxpayer can request an extension for various reasons, including the need for additional time to gather documents, personal circumstances, or to consult further on complex tax issues.
Critical Dates for 2024
April 15, 2024: This is the standard deadline for filing individual tax returns. If you require an extension, you should file for it by this date.
October 15, 2024: This is the deadline for those who have received an extension. No further extensions can be requested past this date.
How to Request an Extension
To file for an extension, you can:
Electronically file Form 4868 using IRS e-file.
Make a payment using a bank account, credit or debit card (fees apply), or other IRS-approved electronic payment methods, indicating that it's for an extension.
Post-Extension Filing
After receiving an extension, you'll have until October 15, 2024, to file your return. Keep in mind, the extension does not apply to any tax payments due. If these aren't paid by April 15, 2024, you may face penalties and interest on the unpaid amount.
Benefits of an Extension
Consider an extension if:
You are waiting for additional tax documents.
You've encountered personal or family emergencies.
You have intricate tax situations requiring more thorough preparation.
Additional Considerations
Filing an extension, even if you aren’t able to pay the tax due, will greatly reduce penalties.
An extension does not extend the due date for traditional IRA, Roth IRA, or HSA contributions. These contributions must be made on or before April 15, 2024, to qualify as a 2023 contribution.
If an extension is filed, the due date for SEP IRA, Solo 401(k), or SIMPLE IRA contributions is also extended.
If you pay quarterly estimated taxes, the first payment for 2024 is still due on April 15, 2024.
Federal (IRS) penalty for late payment is 0.5% of the unpaid balance per month plus interest of 8%*
Oregon penalty for late payment is 5% of the unpaid balance per month plus interest of 6%*
More information is listed on our FAQ page
Our Promise to You
At Reliable Tax, our goal is to guide you smoothly through tax season. Whether you file by the regular deadline or with an extension, we're here to provide expert support.
For assistance with filing an extension, preparing your tax return, or any other tax-related queries, please reach out to us. We're committed to making your tax experience as efficient and worry-free as possible.
*Interest rates adjust quarterly.