Won’t be ready to file your taxes on April 15? Here’s what to do

The deadline for filing taxes has consistently been April 15, but if life gets in the way, you don’t need to panic.

Tax Day, When is Tax Day, filing taxes, tax extensions, filing tax extensions, tax season, taxes, tax penalties, April 15, how to file a tax extension, personal finance, financial advice, theGrio.com
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In case you weren’t already scrambling, taxes are due on April 15 — which is just a few short days away. As you likely already know, preparing to file your taxes can take a lot of time and effort, meaning getting it out of the way and done will be a huge sigh of relief for many. But if you are finding yourself up against time and falling short, you may need other options. 

Even though we file taxes annually, a lot can change over the course of a year. Maybe you bought or sold a house, got married or divorced, or had a baby. Maybe your income increased greatly, or you started a business. Whatever it is, life is going to life, and maybe you need a minute or two for your taxes to catch up. 

So if you haven’t gotten it all together in time to file your taxes on April 15, what can you do — and what happens if you do not file your taxes by the 15th? First, the legality of it all: Taxes are due April 15, all the time. The only time that changes is if the 15th falls on a weekend or conflicts with a holiday; then, you typically get until the 17th. Barring those circumstances, April 15 has been the filing deadline since 1955, so the best thing you can do is get those taxes in on time.

However, as stated earlier, life happens. So if you just cannot get your taxes in by or on April 15, here is what you can do:

First, ignore the inclination to do nothing. So many people do this, to the tune of the IRS assessing billions in penalties for tax returns not filed on time. This is not something that you can ignore or get to when you have time. Not filing anything can actually cost you more money than you might eventually owe. 

Instead of doing nothing, file for an extension. You can file IRS form 4868, a no-cost, penalty-free document taxpayers can submit to the IRS if they need more time to file their individual federal tax returns. By filing for an Automatic Extension of Time, you may have an additional six months — or until Oct. 15 — to get your tax return in. That said, the deadline to submit form 4868 remains the same: Tax Day, April 15. If you allow that deadline to pass, so does your chance to get an extension — and any returns filed after April 15 without form 4868 will be considered late and therefore incur a late filing penalty.

Bottom line: It is better to file for an extension than to not file anything and incur penalties. Even as a financial expert who is hyper-aware of tax deadlines and potential liabilities, I have filed form 4868 myself. There was a year when I moved and lost my W2s; I needed time to get settled and ended up going to the Taxpayer Advocate Service to get a copy of my wage and tax transcript (yeah — because adulting). It may not have been fun, but I was able to file for an extension and subsequently file an accurate tax return by Oct. 15. 

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Now that we’ve covered how to file for an extension, please note a major caveat: An extension to file your taxes is not an extension to pay the taxes you owe. Some people think it is better to wait to file taxes until they have the money to pay the taxes owed, but that is simply not the case.  

Taxes can turn into real debt. Typically, interest accrues on your unpaid taxes from the date the return is due until the debt is paid — and depending on how long that takes, that can end up being a lot of money. In fact, the accruing interest could amount to more than you owed to begin with. The late payment penalty is usually one-half of 1% for each month or part of a month the tax remains unpaid, up to 25 percent.

With that in mind, even if you are not ready to file the actual return, if you learn that you actually owe, try to pay as much as possible upfront. 

So, if you’re not ready to file your taxes on Monday, don’t panic; most taxpayers can digitally file form 4868 to request an automatic six-month tax filing extension. And note: While you don’t need to give a reason why you are requesting the extension, should your request be denied, the IRS will contact you directly to let you know why. 

After filing for an extension, you may feel relief knowing you’ve bought yourself a few extra months, but use that time wisely and don’t forget to get that return in by the Oct.15 deadline. If you miss that extension deadline, there won’t be any additional options, and those fees and penalties will immediately begin to add up.

Happy filing!

Jennifer Streaks

Jennifer Streaks is Senior Personal Finance Reporter and spokesperson at Business Insider and a financial contributor at theGrio. A nationally recognized expert on money and affordable lifestyle living, Jennifer is an established financial columnist who has been featured on CNBC, Forbes, ABC, MSNBC, CBS, and more.