You’ve already gotten three extra days for the tax deadline. Typically the deadline is April 15th, but given the holiday weekend, that date was extended to April 18th.
If you’re not ready to file just yet, you can file an extension.
“You can get with your tax professional, and they’ll be able to easily get an extension for you,” said Mark Knight with Watkins and Co. CPAs. “They need to file a form 4868 to get an extension to the October 15 deadline.”
Knight said there is a free extension process at IRS.gov.
While the deadline gets you out of the late-filing penalty, it doesn’t get you completely out of the woods.
“It does not get you out of the failure to pay penalty,” said Watkins. “So what people will do is estimate what they think they’ll owe and pay that with their extension.”
If the new deadline passes and more is owed, that must be paid then, or with the help of a payment plan.
A few things may cause one to need a payment plan for large amounts that are owed.
“For example, I had a client this year who lost some deductions that they normally get because they flipped an investor property for a $15,000 profit,” said Knight. “So yea, you are taxed on that income, but you may lose some deductions you typically enjoy, like the deduction for interest on student loan debt.”
Knight added that if you file a federal extension, then the extension also applies to state taxes as well.