We all know that filing taxes can be a stressful ordeal. With the hustle and bustle of everyday life, it’s not uncommon to fall behind on your paperwork. Whether it’s due to a change in your financial situation, a health issue, or simply an oversight, needing an extension to file your taxes is not uncommon.
Fortunately, the IRS provides several ways for individuals and businesses to request an extension. In this article, we will be discussing everything you need to know about getting an extension from the IRS in New York. From the different methods available to the requirements and deadlines you should be aware of, we’ve got you covered.
Let’s get started and make the process of requesting an extension as easy as possible.
Understanding Tax Extensions
A tax extension is a legal provision that allows taxpayers to extend the deadline for filing their tax returns with the relevant authorities beyond the established deadline. Usually, the deadline for filing tax returns is on April 15th, but taxpayers can request an extension for six months, bringing the deadline to October 15th.
The purpose of filing for an extension is to give taxpayers extra time to organize their financial records, reduce errors in their returns, and avoid penalties that accrue for late payment or failure to file taxes. Filing for an extension is beneficial because it relieves stress and pressure on taxpayers, especially the ones that have complex tax situations.
It also provides them with more time to ensure that they take advantage of all tax credits and deductions provided under the law, thus reducing their overall tax liability. However, not filing for an extension when necessary could result in numerous consequences such as late penalties, interest on unpaid balances, as well as damage to your credit score.
Additionally, it’s essential to note that filing an extension does not mean that the payment of taxes owed can be delayed beyond the tax deadline. Taxpayers are still required to pay taxes owed by the original due date to avoid penalties and interest.
Automatic vs. Non-Automatic Extensions
When it comes to filing tax returns, taxpayers may require more time to submit their forms. In such cases, extensions can be granted to them. The two types of extensions that taxpayers can apply for are automatic and non-automatic extensions.
- Automatic extensions are the most common and are granted automatically to taxpayers who request them by the tax-filing deadline. In general, taxpayers in New York receive automatic extensions if they file their request on or before the deadline of the original tax return. This means that they have an additional six months to file their returns. Some taxpayers, however, may need to apply for non-automatic extensions. Non-automatic extensions, also known as discretionary extensions, are granted only for a limited period, and taxpayers need to show valid reasons for their requests to be considered.
- Non-automatic extensions may be necessary if a taxpayer is involved in a catastrophic event, which has resulted in the loss of important documents. It may also be necessary if the taxpayer is dealing with a serious illness or injury, which has prevented them from filing their tax returns before the original deadline.
In general, taxpayers should apply for automatic extensions, as these extensions can be obtained with minimal effort, and they avoid additional fees and penalties.
How to Request an Extension in New York
If you are a resident of New York and need more time to file your tax returns, you may request an extension. However, it is important to note that the process of requesting an extension is different for federal and state taxes.
Federal Tax Extension
If you need more time to file your federal tax returns, you can request an extension using Form 4868. This form allows you to get an additional six months to file your taxes without facing any penalty. You can obtain it from the IRS website or any tax professional who has access to it.
To complete the form, you need to provide your name, address, social security number or taxpayer ID, estimate of the tax you owe, and the amount of payment you are making along with the extension. You can choose to make a partial or full payment, but if you don’t make any payment, you may be subject to interest and penalty charges.
Once you have filled out the form, you have different options for submitting it. You can mail it to the IRS, e-file it through an authorized provider, or request your tax professional to file it on your behalf. It’s important to note that the extension only applies to filing your returns and not to paying any owed taxes.
You still need to make any necessary payments by the original due date if you want to avoid facing late payment penalties or interest charges.
The deadline for filing Form 4868 is typically April 15th, which is the same as the deadline for filing your tax returns. However, in some years, like 2022, the deadline for both has been extended to May 17th due to pandemic-related issues. If you miss this deadline, you may face penalties and interest charges on any unpaid tax amounts.
Therefore, it’s advisable to submit the form as soon as possible if you know you cannot meet the original deadline. Overall, filing for an extension can increase your flexibility and reduce your stress in dealing with your tax-related obligations.
New York State Tax Extension
If you need more time to file your New York state tax return, you can request an extension using Form IT-370. This form is available on the New York State Department of Taxation and Finance website and at any tax office or library in the state. To complete the form, you’ll need your name, address, Social Security or taxpayer identification number, and estimate of the amount you owe.
You’ll also need to indicate the reason for your extension request and the date by which you plan to file your return. It’s important to note that an extension to file does not mean an extension to pay, so you should try to estimate your tax liability as accurately as possible.
Once you’ve completed the form, you can submit it via mail, e-file, or through a tax professional. If you choose to file electronically, you can use tax preparation software, such as UltimateTax. The deadline to request an extension is April 15th, which is also the deadline to file your return.
If you file for an extension and ultimately don’t submit your return by the deadline, you may be subject to penalties and interest.
Remember that an extension only gives you more time to file, not to pay, so if you owe taxes, you should pay with your extension request to avoid accruing additional fees. By following these steps, you can get the extra time you need to file your New York state tax return without accruing unnecessary penalties.
What Happens After You Request an Extension?
Once you request an extension for filing your taxes, the next step is to wait for a response from the IRS and New York State Department of Taxation and Finance. Typically, it takes up to three weeks to receive a response from the IRS, while the state of New York takes up to four weeks.
If Your Extension is Approved
If your extension to file taxes is approved, you will have a new deadline to submit your tax return. For individuals, the new deadline will be October 15th, while corporations will have until September 15th to file their returns.
However, it’s essential to understand that an extension to file does not mean an extension to pay. If you owe taxes, interest and penalties will still apply if payments are made after the original due date of April 15th. The interest rate is determined by the IRS and is subject to change every quarter. Currently, the interest rate for late payments is 3% per year, compounded daily.
Additionally, late filers may be subject to a late payment penalty of 0.5% of the unpaid taxes per month or part of a month, up to a maximum of 25%. To manage the additional time effectively, it’s important to prioritize your tax preparation and make a plan to file by the new deadline.
If Your Extension is Denied
An extension for filing taxes may be denied due to various reasons. Some reasons may include submitting an incomplete or inaccurate form, failing to pay the estimated taxes owed, or missing the deadline for submitting the extension request.
In addition, if the IRS finds any discrepancies in the taxpayer’s financial statements or tax history, the extension request may also be denied. If your extension request is denied, the next step is to file your taxes as soon as possible.
Failure to do so may lead to penalties and interest on the amount owed. The IRS charges a penalty of 5% of the unpaid taxes for each month that the filing is late, with a maximum penalty of 25%. Interest on the unpaid taxes is also added on a monthly basis, based on the federal short-term rate plus 3%.
Let UltimateTax Support You Through the Extension Process
In summary, if you find yourself running out of time to file your tax return, don’t panic! UltimateTax is here to support you through the extension process. Our user-friendly software simplifies and streamlines the process of filing an extension, allowing you to avoid penalties for missing the deadline.
With UltimateTax, you’ll have the peace of mind that your tax filing obligations are taken care of, giving you more time and energy to focus on other important tasks.