Can you believe we are already into the first week of April? Which means the tax-deadline is right around the corner. As a multi-tasking person-on-the-go, I understand how ever-day life activities can consume your attention. Which makes finding time to organize financial records for tax filing season virtually impossible.
I hear your frustrations, and so does the Internal Revenue Service (IRS). Fortunately, the IRS offers individual and business tax extensions. An individual business income tax extension can be filed using Form 4868. This includes all taxpayers who file 1040s, contractors who submit 1099s, as well as single-member LLCs and Schedule C Sole Proprietors.
So, by now you are probably wondering how long is the extension, right? The IRS grants a 6-month extension. This extra amount of time allows you to file your forms without paying late fees or penalties. Please note that receiving an extension does not give you more time to pay — it only gives you more time to file your return.
If you can’t file your return by the April deadline, you will need to estimate your tax bill and pay as much of that as possible at that time. Anything you owe after the time period is subject to late payment penalties and crazy interest.
Timelines and Due Dates
I won’t bog you down with all the details, but here are some key points to know:
You must file your individual return by October 15, 2019.
If you request an extension and make an estimated payment in April, you still need to submit your final return. If you don’t file by the extension deadline, the penalties could really hurt your pockets.
Tax reform and state rules vary: It is also important to note that many states allow for an automatic filing of state extensions when a federal extension is filed, but other states may have different procedures.
Individuals and Business owners should do their due diligence and not wait until the last minute. Work with a qualified accountant now to ensure you are well aware of your filing obligations this year and beyond.
*A Special Note to Businesses Owners: Great, so you have filed your business extension, but depending on the nature of your business, you may also need to meet other filing deadlines. If you are a business and filed for an extension, you must submit your return by September 15, 2019.
*Robin Boyd, President / CEO of Essential Accounting Consultants / MLM tax specialist. She connects with Entrepreneurs, Home-based business owners and Network Marketers across the country to help them plan and prepare their income tax returns.