If you are not ready to file your taxes when April 15th comes around, you can apply for an extension to file. Remember, even if your extension is granted, you will still owe any tax liability plus interest.
An extension will keep you from getting hit with a late-filing penalty of 5% of the unpaid taxes for each month or part of a month you’re late, up to 25%. That’s in addition to a late-payment penalty of 0.5% of the unpaid taxes for each month or part of a month—plus interest at a rate of the federal short-term interest rate plus 3%.
- Get an IRS Form 4868 for the proper year.
- Fill your name, address, social security number and if applicable your spouse’s information
- Estimate your yearly income based on your paystubs, 1099’s, W-2 and previous year if you are not experienced a significant change from previous year.
- Enter the amount of tax paid during the tax year (estimated tax payments, or any amount withheld from your paycheck). Take in consideration any credits that you are entitled.
- Estimate your tax liability based on your taxable income. You can refer to IRS Form 1040-ES for additional instructions.
- Lastly since you are charged interest on your back taxes, pay as much as you can to minimize any interest or penalties. Make payments to www.irs/gov/payments
If you need assistance, get in touch with LUIS JOEL VAZQUEZ, CPA PA. We can help you!