Are you worried about filing your personal 1040 taxes on time? Fret not – there’s an option that can give you some breathing room: filing an extension.
A 1040 extension gives you an automatic six-month extension to file your tax return and is relatively easy to obtain. But before you dive in, here’s what you need to know about the entire process.
The rules of filing an extension
An extension gives you time to gather all your necessary documents and file your taxes later. But what’s important to understand is that even as you apply for an extension, you still need to pay any taxes you owe by the tax deadline to avoid penalties and interest.
Another crucial point to note is that an extension only gives you additional time to file your taxes, not to pay them. The IRS will still calculate interest and penalties on any taxes you owe, so it’s best to estimate your tax liability and pay it by the deadline.
How to apply for a 1040 extension
Applying for a 1040 extension is easy. You can do it online or by mailing Form 4868, and you only need to provide basic information like your name, address, and Social Security number.
If you’re applying online, you’ll need to make an estimate of your tax liability and submit it with your extension request. If you’re mailing the form, there’s a worksheet that can help you estimate your liability.
When to file
If you’re applying for an extension, you still need to do it by the tax deadline, which is typically April 15th. However, due to the COVID-19 pandemic, the IRS extended the tax deadline for the 2020 tax year to May 17th, 2021.
Things to keep in mind
While filing a 1040 extension can give you some breathing room to finish your taxes, it’s essential to keep in mind that it’s not a way to avoid paying your taxes. You still need to estimate and pay any taxes due by the tax deadline to minimize interest and penalties.
Additionally, if you’re expecting a refund, there’s no advantage to filing an extension as there won’t be any penalties or interest on missing tax payments.
Summing it up
In conclusion, filing a personal 1040 extension can be a useful tool if you need extra time to file your taxes. However, it’s crucial to keep in mind that the extension doesn’t give you more time to pay your taxes, and you still need to estimate and pay any taxes due by the tax deadline. Adhere to these rules, and you’ll be able to avoid penalties and interest, even as you get a little extra time to file.
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