An IRS extension doesn’t grant you more time to pay your taxes, says accountant Michael Rasmussen.

If you can’t pay your taxes in full by the due date, try applying for an Online Payment Agreement.



 

Q: I filed for an extension on my taxes this year, but I was surprised to realize I still had to send the IRS a check. How does the extension work?

 

A: Some people get confused about what it means to file for an extension on their income tax returns. If you haven’t finished filling out your return and need more time to get it done, you can receive a six-month extension. But that doesn’t mean you get extra time to pay the taxes that you owe.

Getting an extension is easy. The fastest and easiest way is to visit the “Free File” link at IRS.gov. Here, you can use tax filing software that guides you through the steps of filling out the required forms. You can also use this service to request an extension in a matter of minutes. Anyone, regardless of income, can use this free service using Form 4868. Completing the form gives you an additional six months (that is, until October 15 for the year 2015) to file your tax return. However, to get the extension, taxpayers must estimate their tax liability on this form and pay any amount due by the April 15 deadline.

By filing this form and paying the estimated amount due, the taxpayer will avoid a costly late filing penalty, which is normally 5% per month based on the unpaid balance. In addition, any payment made with an extension request will reduce or eliminate interest and late payment penalties that apply to payments made after April 15. The interest rate is currently 3% per year, compounded daily, while the late payment penalty is normally 0.5% per month.

Alternatively, if you cannot pay the balance due, consider applying for an Online Payment Agreement, which allows you to stretch out payments over 72 months. Taxpayers can choose this option even if they have not yet received a bill or notice from the IRS. With the Online Payment Agreement, no paperwork is required, nor do you have to call, write or visit the IRS. This option enables you to level out your cash flow and budget for regular monthly payments.

 

Edit Module

Tell us what you think at or email.

Edit Module
Edit ModuleShow Tags
Edit ModuleShow Tags

Related Articles

Make the most out of your pizza boxes with these tips from operators

Pizza boxes offer up prime marketing space for operators—but are you using yours to its full potential?

True Greek pizza isn't just olives and feta cheese.

PMQ explores Greek-style pizza’s characteristics and history in the United States.

The Dough Doctor tackles effective dough management strategies

If your pizzas aren’t coming out right, here’s how to put your finger on the problem.

What's Your Story? Vets2Success

An Iraq War veteran is using the culinary arts to transform the lives of fellow vets seeking a new start in life.

Recipe of the Month: Get the gluten out with DeIorio's Fresh Prosciutto Gluten-Free Pizza

Serve your customers this prime pie made with fresh prosciutto, garlic and DeIorio's gluten-free pizza shells.

Is your pizzeria geared up for National Pizza Month?

New managing editor Bill DeJournett runs down the upcoming marketing frenzy.

Let your fingers do the talking with text blasts

Think Tankers weigh in on using text blast programs with your market base.

Some Italians Jumping Ship on True Neapolitan Pizza

Italian consumers today demand a healthier product, which has pizzaioli experimenting with different kinds of flour and reviving ancient techniques.

Product Spotlight: September 2018

Pizza box knives, speedier pans and more.

Idea Zone: Custom Cheese Shakers Make for a Fun & Exciting Functional Promotional Item

Make a statement with these branded cheese shakers from CustomCheeseShakers.com
Edit ModuleShow Tags
Edit ModuleShow Tags
Edit Module
Edit Module
Edit ModuleShow Tags
Edit ModuleShow Tags
Edit Module
Edit ModuleShow Tags
Edit ModuleShow Tags