The IRS is giving taxpayers alternative options if they miss the April 15 deadline to file federal income taxes. While still urging people to file their taxes as soon as possible, the IRS stated that there are ways to avoid penalties for late filings.
What are the options for people who file their taxes late?
People who file at the last minute have the option to ask for an extension, ABC News reported. Taxpayers can visit the IRS online payment portal and check an extension-request box. The other option is to mail the extension request. People who choose this option need to fill out Form 4868, which requires taxpayers to estimate the amount they owe for the filing year. The form can be sent to an address found on the IRS website. A tax extension gives people an additional six months to submit their tax forms without being penalized. This means taxpayers can have until Oct. 15 to send their forms.
An automatic extension is also given to taxpayers who live in a federally declared disaster area, as well as military members “stationed abroad or in a combat zone and citizens living outside the country.”
What is the penalty for filing late taxes?
People who file late and don’t ask for an extension may face penalties that equals to at least 5% of the taxes they owe for each month; the maximum penalty can go up to 25%. Interest and penalties may continue to add up until the full balance is paid, Newsweek reported.
People who can’t pay the full balance can reduce interest by paying as much as possible. Those who have paid on time in the past three years or people who have set up a payment plan for any amount they owe, may be be able to get penalty relief, per the IRS. The agency may send late notices by mail.