If you’re expecting a personal income tax refund, it’s smart to file your return on or before April 15 and get your refund back as soon as possible. If you can’t complete your tax return before the deadline, however, filing an extension will buy you six additional months to file the return.
It is better to file an extension than an incorrect return. You will not be fined, cited or penalized for filing a tax extension, and it will not increase your chance of being selected for a random audit. Moreover, if you use a certified public accountant or tax preparation service, you may get better service during the off-peak season as tax professionals are less busy after April 15.
Filing an extension is quick and easy “From the Internal Revenue Service (IRS) website, you can e-file a tax extension or print the forms to mail your extension. However, after the April 15 deadline you can no longer e-file your tax return.
Although filing an extension gives you additional time to file your return, it does not postpone your tax liability. If you owe money to the IRS, you are required to pay 90% of it by April 15. Otherwise, you will be subject to late-payment penalties and interest on any unpaid amount.
If you don’t file an extension or a personal income tax return by April 15 and you owe taxes, the IRS can charge you a 5% failure-to-file penalty each month the tax return is late, up to a maximum of 25% of the amount due. While personal income tax returns are due April 15, it’s also important to keep in mind that LLC, LLP and partnership returns are due on the same date, while S corporation and C corporation returns are due March 15.