Got a Tax Extension? Beware This Important Deadline

You don't want it to slip under your radar.

Although the IRS doesn't exactly have a reputation as being a helpful agency, it's actually pretty flexible when it comes to filing tax returns. If you can't get your taxes done by the mid-April deadline, you can always request an extension and get an additional six months to submit your return.

Better yet, you don't need to come up with a creative excuse or reason for needing more time. All you need to do is request an extension by the original filing deadline, and the IRS will say yes. It's that simple.

If you asked for a tax extension this past April, you may have already gotten your return in by now. But if not, you'll want to get moving quickly. You only have until Oct. 17 to submit your 2021 tax return. And if you're late with that filing, the financial consequences could be pretty extreme.

Being late could cost you

When you're due a tax refund, there's no financial penalty for submitting a tax return late -- and that includes being late after having asked for a tax extension. Granted, the longer it takes you to get your return over to the IRS, the longer you'll have to wait for your refund to hit your bank account. So in a way, being late means you're effectively penalizing yourself.

But if you owe the IRS money, being late with your taxes could cost you a lot. If you got a tax extension but don't manage to get your return done by Oct. 17, you'll face a

failure-to-file penalty equal to 5% of your unpaid tax bill for each month or partial month you're late. So if you owe the IRS $3,000 and are a month late, it'll cost you $150. If you're two months late, you'll pay an extra $300 -- plus interest and penalties by virtue of being late with your payment itself.

Remember, a tax extension doesn't give you more time to pay your tax bill. So if you owe the IRS money from the 2021 tax year and haven't paid any part of that bill yet, you've been accruing interest and penalties on that sum by virtue of not paying by the original April filing deadline. But if that's the case, you don't want to add to your costs by being late with your return and getting slapped with a failure-to-file penalty.

What if you can't pay?

You may be procrastinating on your taxes because you know you don't have the money to pay the IRS what you owe. But being late with your tax return won't solve that problem -- it will only make it worse.

In fact, another positive thing about the IRS is that it works with taxpayers who are short on funds and can't submit their tax bills in full. If you file your tax return and can't pay, you'll have the option to get on an installment plan where you pay your tax bill over time. As long as you stick to that plan, the IRS won't attempt to garnish your wages to get repaid (whereas if you ignore a tax bill, that could happen).