The deadline to file your 2022 tax return is two weeks away. If you’re still not ready to submit your paperwork, you might be starting to feel the looming shadow of that tax deadline, and wondering what you can do if you won’t have your return ready in time. Luckily, there are options available to you that can give you a little bit of breathing room. Keep reading to learn what to do if you won’t be prepared to file before the tax deadline.
File for an Extension
Requesting an extension to file your tax return is actually quite easy. Most taxpayers simply need to submit Form 4868 to the IRS. This can be done electronically, which will provide you with an immediate filing extension on your tax return. This gives you an additional six months to get all of your paperwork in order, complete your tax forms, and submit your return without fear of late filing penalties.
However, it’s incredibly important to be aware that a tax extension is only an extension to file your return; it does not give you an extension to pay what you owe. This leads us to our next point.
Submit a Tax Payment
Even if you won’t be ready to file your return before the deadline, you will need to provide a payment for the amount you believe you will owe. This, of course, means that you’ll need to calculate your tax debt based on the information that is already available to you. For example, if you haven’t gotten all of your paperwork pulled together to file yet, but you know that your income and expenses are roughly the same as last year, you can look at last year’s tax return to see what you paid, and provide a payment to the IRS for the same amount when you file for your extension.
If there are significant differences from the previous year’s taxes, you should do your best to calculate what you would owe and provide that payment. However, submitting any payment, even if you’re not completely confident in its accuracy, is better than submitting no payment at all. If it turns out that you owe more than what you’ve already paid, you may still face late filing fees and interest, but those costs will be much lower than if you hadn’t submitted an estimated payment at all. If you happen to overpay when submitting an estimate payment, don’t worry; you’ll be reimbursed the overpayment amount when you submit your final tax return.
Request an Extension to Pay
For some people, being able to submit their completed tax return is only part of the problem. Others are unable to submit any payment at all before the tax deadline, much less the full amount that they believe they will owe. As we stated earlier, a tax extension does not extend the deadline to pay—but that doesn’t mean there are no options available to you.
The IRS offers several different tax relief programs for taxpayers. The simplest one to receive is a payment extension. Much like an extension to file, this provides you with six additional months to submit payment to the IRS. However, this type of extension is much more difficult to receive than an extension to file. You will have to submit Form 1127, along with a full statement of your assets and liabilities, and an itemized list of your income and expenses for the past three months. These statements will need to prove that you’ve experienced undue financial hardships, and that paying your taxes is not financially feasible. The sooner you can submit this request, the more likely you will be to get a response before the tax deadline, and hopefully avoid late payment penalties.
Meet with a CPA
At this point in tax season, it’s often a good idea to stop trying to handle your taxes on your own. With the deadline looming and stress mounting, many taxpayers make avoidable mistakes while trying to file their taxes themselves, which can lead to additional fees and rejected returns. If you’re scrambling to get your tax return filed on time, we invite you to reach out to our experience CPAs here at Peacock & French, CPAs. We can help you to submit your return as soon as possible and, if necessary, guide you through the process of filing for an extension to file or an extension to pay your taxes. Call now to schedule a meeting with a tax preparer.
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