Below are some of the circumstances that might lead to filing an extension and the procedures that you need to follow in those cases.
Important note: the material provided here is for informational purposes only and is not professional tax advice. It is intended for our readers in the United States. Please consult a professional tax advisor to discuss your specific tax situation.
Basic Guidelines
You can get a six-month extension for filing your tax return, provided you fill out Form 4868 and file it manually or electronically by the 15th of April. Your late returns will, however, attract IRS’s attention and might result in penalties depending on IRS rules.
The extension you will receive will be only on the filing of your tax returns, and not on any tax liabilities. You will be liable for interest at 0.5% on any unpaid tax per month, if the amount you have paid is less than 90% of the total tax due.
Outside the U.S?
If you are planning to be outside of the United States on the 15th of April, then you must let the IRS know in advance – even though there is no guarantee that they will approve your application.
You will also have to pay your taxes, if any are due, by credit card through any service provider such as H&R block. That provider might also charge you for this service. You can find qualified service providers on the Internet.
In certain cases where a person is enlisted in the armed forces and is posted outside the United States when tax returns are due to be filed, or if that person has his or her place of business outside the United States, then that person might be eligible for a two-month extension.
Again, however, taxes due, if any, must be paid based on the available data and your previous tax returns.
If you get a two-month extension approved by the IRS but are expecting some income from a foreign source after those two months, then you can fill out Form 2350 and apply for an extension until the expected income materializes.
If you find that you are unable to file your returns in those two months, then you can get a four-month extension after filling out Form 4868.
Unable To Pay?
If you are unable to pay your taxes due after the six-month extension, then you will need to fill out Form 9465 and request that the IRS accept your taxes in installments. If you owe no more than $10,000 in taxes, then the IRS must accept your request for installment payments, provided you satisfy all their conditions.
These conditions include proving that you are unable to make your tax payment in full and that you have made full tax payments in the previous five years. The installments are stretched over three years, and you will have to pay interest ranging from 0.25% to 0.5% per month, depending on certain conditions.
This information should help you if you need to file for an extension in paying your taxes. Get an experienced tax consultant to help you understand the different rules of the IRS when filing for an extension.
In addition, you should be prepared to pay interest or penalties on any delayed payments.
