1 Week to the Tax Deadline: Here’s How to Avoid Late Fees
Peacock & French CPAs
Apr 04, 2022
The tax deadline is now exactly 2 weeks away. If the deadline took you by surprise this year, you’re not alone. If you’re scrambling to get your taxes filed before the deadline, here are a few tips that might help you avoid unpleasant late fees.
The tax deadline is only 1 week away. If the deadline took you by surprise this year, you’re not alone. Due to the extension taxpayers received last year during the COVID-19 pandemic, it can feel as if you only recently filed your last tax return. And with the stimulus payments, Paycheck Protection Program loans, advanced Child Tax Credit payments, and other changes that may have impacted your taxes for 2021, you may still feel unprepared to file. If you’re scrambling to get your taxes filed before the deadline, here are a few tips that might help you avoid unpleasant late fees.
File an Extension
The first course of action available to anyone who doesn’t think they’ll be able to file their return on time is to file a request for an extension. This is done using Form 4868, Application for Automatic Extension of Time To File, which can be found on the IRS’s website. Filing an extension is relatively straightforward and should only take a few minutes. It can all be completed online, and you can file the request for an extension for free.
An extension of time to file will also be automatically processed if you pay all or part of your taxes before the tax deadline. Submit an electronic payment to the IRS and state that the payment is for an extended tax return, and you don’t even have to worry about filling out the form above. However, if your calculations determine that you will be owed a refund on your return, you should fill out the form as described.
It is incredibly unusual for an extension request to be denied, but if the IRS does deny your extension for any reason, they will contact you to inform you of this so that you can take proper action. For most people, the extension request will be accepted, and you will be granted an additional 6 months to get your paperwork in order and file your return.
Extension of Payment
When you file an extension of time to file, the filing of your return is the only thing you’re getting an extension on. It is not an extension on paying your taxes, and failing to pay what you owe before the upcoming deadline will still result in late payment fees and penalties. If you need an extension to pay your taxes, and not to simply file your return, the issue becomes a bit more complicated.
In some cases, the IRS will grant an extension for payment due to serious financial hardships. If you’ve experienced undue hardship in the last year that makes it impossible to pay your taxes, you can fill out and submit Form 1127, Application for Extension of Time for Payment of Tax Due to Undue Hardship. The specific conditions under which they may grant such an extension can be found on the reverse side of the application.
If you don’t qualify for this type of extension, you may be able to qualify for a payment plan or Offer in Compromise with the IRS. These types of plans can often be negotiated, but it’s best to work with one of our CPAs to ensure that you handle the negotiation process properly.
Whatever your situation may be, please note that it is always best to file your return or an extension as soon as possible, and communicate openly with the IRS regarding your ability to pay. Simply not filing your return because you can’t pay what you’ll owe does not benefit you, and will only result in additional fees and penalties.
Taxpayers Out of the Country
If you’re out of the country on your regular tax deadline, you’re automatically allowed 2 additional months to file your tax return and pay any amount due, without the need to request an extension. This would make your tax deadline July 15, 2021. However, interest may still be charged on any taxes that you owe after the regular tax deadline. If you don’t expect to be back in the country by July 15, you will need to complete Form 2350 to request an additional extension to a date after you expect to return.
Contact an Accountant Today
If you’re struggling to get your paperwork or funds together to file and pay your taxes within the next week, please reach out to us. We can help you to explore your options, get an extension filed as quickly as possible, and work out a payment plan with the IRS if necessary. Give us a call right away to schedule an appointment before the deadline.