Please ensure Javascript is enabled for purposes of website accessibility

Don't Have Your Taxes Ready? Do This 1 Thing Now

By Maurie Backman - Apr 11, 2019 at 9:17AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The IRS will give you more time to get your taxes done -- you just need to officially ask for it.

The April 15 tax filing deadline is just a few days away, so if you've yet to complete your return, now's the time to get moving. That said, if your return is complicated, or if you're missing key documents required to do your taxes, then you may have to accept the fact that you just won't make it in time for the deadline.

If that's the case, don't panic. The IRS will give you more time to submit your return if you aren't ready. All you need to do is request a tax extension.

How tax extensions work

Filers who need more time to get their taxes done can request an extension, and the IRS will grant it automatically. That's right -- you don't need to rack your brain to come up with a compelling excuse as to why you couldn't get your act together in time for the deadline. All you need to do is fill out Form 4868 and get it over to the IRS by April 15. Once you do, you'll automatically get an additional six months to submit your tax return, thereby extending your filing deadline to Oct. 15.

Tax Form 1040 on computer keyboard

Image source: Getty Images.

Keep in mind that Form 4868 only applies to federal taxes. If you need more time to file your state return, you'll need to research your state's rules, since they vary.

Now the good thing to keep in mind about tax extensions is that they take the failure-to-file penalty off the table. This penalty applies to filers who owe money to the IRS but don't submit their tax returns in time for the deadline. The failure-to-file penalty can be quite costly -- it's 5% of your unpaid tax debt per month or partial month your return is late, up to 25%.

That said, if you owe money on your taxes and file an extension, there is a penalty you'll need to worry about: the late payment penalty. Though a tax extension will give you more time to submit your return, it won't extend the deadline by which your tax bill is due. And if you're late with that payment, you'll face a late payment penalty equal to 0.5% of your unpaid taxes per month or partial month your tax bill is late, up to 25%.

Don't rush through the filing process

Rushing through the tax-filing process because you're pressed for time could cause you to make an error that works against you. For example, if you neglect to report income the IRS has a record of, it could land your name on the agency's audit list. Furthermore, if you're so hurried that you neglect to claim key tax credits or deductions, you could lose out on serious money.

Therefore, if you really can't finish your taxes by April 15, go ahead and get that extension. But don't use it as an excuse to procrastinate another six months. The longer it takes you to get your taxes in order, the more interest you risk racking up if it turns out you owe the IRS money. And if you're due a refund, the longer it takes to file your return, the longer you'll have to wait on that cash.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.