Postpone Tax Deadline: File an Extension

The United States federal tax deadline is very soon, the due date is April 15!  Since there are only a couple of days left, you may consider filing an extension if you have not filed your taxes yet. 
tax day concept with red circle on calendar date and tax return on table

Postpone Tax Deadline: File an Extension

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When is the tax deadline for this year?

The United States federal tax deadline is very soon, the due date is April 15!

In general, the deadline for federal tax filing is April 15; however, this year it will overlap with Emancipation Day. Therefore, taxpayers will have time to file until April 18.

If you need more detail about the federal tax filing, you may read our comprehensive blog post here.

Since there are only a couple of days left, you may consider filing an extension if you have not filed your taxes yet.

What is a tax return extension?

Filing an extension for the tax return with the IRS postpones the tax return deadline for 6 months.

Filing extension forms will allow you time to file a return until October 17, 2022.

Do I need to pay for tax?

Yes, filing an extension does give you more time to file your tax return, but doesn’t give you more time to pay any taxes owed to the IRS. The deadline for tax payment is still due on April 18.

To prevent any interest and penalty, you should pay any tax amount accrued for the relevant year and then file your tax return.

Filing an extension saves you from the penalty of filing your return late.

What is the penalty for not filing?

The penalty is calculated based on the amount of unpaid taxes as well as how much late a tax return is made.

For each month that a filing is late, the penalty rate is 5% of the unpaid taxes, with a maximum rate of 25%.

What about refunds?

If you overpaid your taxes while filing your tax return, such amounts will be repaid.

For individuals:

Individuals should file a Form 4868 Application for Automatic Extension of Time to File U.S. Individual Income Tax Return for the extension of their tax return deadline. The information required for the form is as follows:

You may also check the IRS’ instructions regarding filing the Form 4868 here.

You can submit Form 4868 to the IRS online or by mail to request an extension of time to file your taxes. This must be completed prior to the deadline of the tax return.

You need to provide your identity information such as your name, address, social security number, your spouse’s social security number, and your individual income details (e.g., an estimate of total tax liability), total payments you’ve already made, the balance due, in order to filling in the form.

Special rules may apply for individuals living outside of the United States, please check IRS guide if you are a citizen or resident living abroad.

For businesses:

Form 7004 needs to be filed if you would like to extend the deadline for your company’s return. You may check the IRS’ instructions for Form 7004 here.

Signature is not required for this form. Employer Identification Number (EIN), address, phone number and incorporation date of company is required for filing the form.

Depending on the company structure, type of Form 1120 will also differ:

  • If you’re applying for an S corporation, you will use Code 25. (Form 1120-S).
  • If you’re applying for a partnership or a multi-member LLC, you will use Code 9. (Form 1065).
  • If you’re applying for a corporate, you will use Code 12. (Form 1120).

For your reference, you may check out the form below:

Please note that Form 7004 does not provide you more time to pay any taxes that you owe, so you still need to pay for the taxes even though you have filed for an extension.

How to file if the company name is amended?

The company will not be eligible for an extension if the name on Form 7004 does not match the IRS database and/or the identification number is wrong. So, if the company name is amended following you submitted your prior year’s tax return, fill out Form 7004 with the previous name.

Please forward your questions and inquiries to [email protected] in order to find out how to file an extension with Clemta taxation and CPA team!

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