The IRS announced taxpayers can ask for a 6-month filing extension regardless of income, extending the deadline to Oct. 15. Figures released today show that as of April 3, the IRS had already received just over 99 million returns and issued more than 77 million refunds averaging over $2,800. This is an extension of time to file; not an extension of time to pay. However, taxpayers who are having trouble paying what they owe may qualify for payment plans and other relief. Either way, taxpayers will avoid stiff penalties if they file either a regular income tax return or a request for a tax-filing extension by the April 15 deadline.
According to Mark Hanson with the IRS Media Relations, the fastest way to get the extra time is through the Free File link on IRS.gov to electronically request an automatic tax-filing extension on Form 4868. To get the extension, taxpayers must estimate their tax liability on this form and should also pay any amount due. By properly filing this form, a taxpayer will avoid the late-filing penalty, normally 5 percent per month based on the unpaid balance that applies to returns filed after the deadline. In addition, any payment made with an extension request will reduce or eliminate interest and late-payment penalties that apply to payments made after April 15. The interest rate is currently 3 percent per year, compounded daily, and the late-payment penalty is normally 0.5 percent per month.
