How to File Your Tax Extension

Tax season is starting to wind down. With just a few more weeks left to get you taxes prepared by the April 15^th deadline, you may be wondering if you will have time to get the done. Fortunately, the IRS is lenient enough to let you file later. But you have to let them know that you will be filing later in the year. Today your accountant in Billings, Montana tells you what you need to know about filing an extension on your taxes.

Your Liability Doesn’t Get a Break

By filing an extension on your taxes, you are able to put off the actual filing until October 15^th. However, that does not mean that any taxes that you owe get to be put off until October 15^th.

If you believe that you will owe on your taxes, you need to estimate the amount that you will owe and send that payment by the April 15^th deadline. But there are some caveats to this.

Pay Too Little – If the IRS thinks that you are paying too little, for instance if you try to send $25, they may deny your request for extension.

Don’t Pay Enough – If you don’t pay at least 90% of what you end up owing, you will have to pay interest on the remaining amount. For instance, you pay $1,000 but it turns out you owe $2,000, then you owe .5% interest on the extra $1,000 every month until you file (in this case about $5 per month).

How to File Your Tax Extension

If you know that you won’t be able to have an accountant in Billings, Montana help you file your taxes before the April 15^th deadline, you can file for a tax extension on your own. Then at any point before October 15^th you can enlist our the help  to finish things up. There are two ways to file that extension.

E-File with the IRS

The IRS provides some software if you meet the income limits. They allow you to file all of your taxes online yourself through their partner site E-File.com (not to be confused with the for-profit website efile.com).

On that site you can begin your tax return, and then select “file an extension” to automatically file your tax extension.

Paper File with the IRS

Some people prefer to simply fill out a paper form rather than create yet another online account. To do so you just have to print off the e-file application by following the link.

It’s as easy as filling in the boxes and then mailing it in.

Pay Your Tax Bill

Even if you have no idea what your tax liability will be, you need to pay something. If you made $100,000 last year, and you didn’t pay any estimated taxes throughout the year, you can expect your liability will be around $25,000. Try to get as close to that as possible.

Because there are some complications that arise, it is probably best to get your taxes started with your accountant in Billings, Montana. Have him file the tax extension. And then work with him in a couple of months to get everything finalized.

Your Accountant in Billings, Montana Can Help!

If you are struggling to get everything together for your taxes, don’t worry! Make an appointment  to get your taxes done, and you will get top of the line service that helps walk you through the steps to filing your tax extension and paying at least some of your liability so you don’t get hit with late payment penalties. Set up your appointment today by calling 406-894-2050 today.