The April rush to get tax returns filed in the United States is well under way, but experts are warning that many filers are clinging to a dangerous misunderstanding about the IRS's rules.
A tax extension to 15 October may give you more time to submit your paperwork, they say, but it does not protect you from interest and penalties if you fail to pay what you owe by the standard April deadline. That is the central 'tax extension myth' the IRS and tax professionals are now trying to dispel.
A tax extension is, at heart, permission to file late. It is not permission to pay late. The IRS itself states this clearly, but the distinction is easily blurred once the relief of 'more time' takes hold.
To get that extra time, individuals can file Form 4868 electronically or by post by the April deadline. Anyone, regardless of income, can also use the IRS's Free File service to request an automatic extension.
Another route is to pay an estimated amount online and tick the box indicating the payment relates to an extension. In that scenario, the payment itself effectively acts as the extension request and no form is needed.
What does not change is the due date for the tax. Any amount you expect to owe still has to be paid by mid‑April. If you fall short, the IRS will charge interest and late‑payment penalties on the unpaid balance from the original deadline, even if your eventual return is filed well before 15 October.
Carl Breedlove, principal tax research analyst at H&R Block, puts it bluntly in remarks carried in US coverage: 'Taxes are still owed by April 15.' The filing deadline moves; the payment deadline does not.
Tax specialists generally recommend filing for an extension if you are missing key documents and cannot reasonably obtain them in time. Partnership statements known as K‑1s are a classic culprit.
Yishai Kabaker, a partner at Gursey Schneider LLP, told one US outlet that if you are missing crucial information, 'you definitely want to file an extension' to avoid guessing and triggering later amendments.
The mechanics are straightforward. If you have no tax due, you can submit Form 4868 online via IRS Free File or through commercial tax software. If you owe money, you can still use Form 4868, on paper or electronically, or simply make an online payment and choose 'extension' as the reason. The IRS will treat that as an automatic request.
Source: International Business Times UK
