Not every taxpayer in the country made the April 15, 2019 tax filing deadline for their 2018 tax returns. Some were still gathering paperwork and trying to navigate the complex new rules. Those who found themselves in this situation may have filed for an extension.
Does a tax extension with the IRS extend the deadline? Yes, you can get a tax filing extension. But note: it only extends the deadline to file the returns. It does not give taxpayers an extended due date on their tax bill. The Internal Revenue Service (IRS) still expects to receive their payment on April 15.
What does this mean? This means if you owe the IRS money and do not pay on April 15 the agency can, and will, apply interest. If the payment is just a couple of weeks late, the penalty is generally manageable. The IRS generally charges a 0.5% penalty based on the unpaid tax for every month the payment is late.
However, if the payment is 60 days late, the IRS will apply a minimum $210 or 100% of tax due penalty — whichever is less.
Is there any benefit to getting an extension? Yes, although penalties can apply to a late payment the taxpayer will not have an additional penalty for filing late. This can be a significant savings. The IRS can apply a penalty of up to 5% of the owed tax for every month the tax filing is late.
What if I cannot pay my tax bill? Those who owe a large amount have options. An attorney experienced in outstanding tax liabilities can review these options and discuss the best program for your situation.