With the tax filing deadline falling today (April 15), the Internal Revenue Service is urging taxpayers to file or take action before the cutoff to avoid penalties.
Taxpayers who are unable to complete their returns by the deadline can request an extension. By submitting Form 4868 or applying online before 11:59 p.m. local time, filers can receive an automatic extension to Oct. 15, giving them an additional six months to file.
However, the IRS emphasized that an extension to file is not an extension to pay. Any taxes owed must still be paid by April 15. Failure to do so will result in penalties and interest.
The penalty for late filing is 5% of unpaid taxes per month, up to a maximum of 25%. In addition, late payment penalties accrue at 0.5% per month, also up to 25%, along with interest on the outstanding balance.
Extensions are commonly used when taxpayers are missing key documents, particularly investment-related forms such as K-1s. Tax professionals advise that filing for an extension is often preferable to submitting an incomplete or inaccurate return.
For those unable to pay their full tax bill, experts recommend applying for an IRS payment plan to reduce financial strain and limit additional penalties.
The IRS also encourages taxpayers to file and pay electronically whenever possible to ensure timely processing and avoid complications.
