Federal Tax Extension in the US: How it can Benefit You

Although the last date to pay your personal income taxes in the US is 15th April, you can extend this deadline for a period of 6 months by applying for a federal tax extension. Filing for a tax extension is simple and eases your stress if you are unable to file a return on time for any reason.

What is Federal Tax?

The Tax levied by the Internal Revenue Service (IRS) of the United States on the annual income of individuals, businesses, or any taxable entity, is called Federal Tax. Annual income includes earnings from all sources such as earnings from employment, gains on sale of capital assets etc.

Federal taxes are calculated annually. The amount of tax has to be paid and returns have to be filed at the end of every financial year by all taxable entities.

What is a Federal Tax Extension?

The last date to file a tax return for individuals is April 15 and for business entities is March 15. If any taxpayer is unable to file a return within this stipulated time frame, he can file for a tax extension. A federal tax extension provides you 6 more months to file your return.

It is important to understand that a tax extension does not give you more time to pay your taxes; it only gives you more time to file your return.

What are the Benefits of a Federal Tax Extension?

If you want to avoid the tax season chaos and the penalties for late filing, you should definitely apply for an extension. Here’s why it’ll be beneficial for you:

1) Automatic Extension: Federal Tax Extensions are automatic, which means that you do not have to sign the document or even provide a reason for the request.

2) Simplifies Processes: You do not need to rush to get your documents and statements complete. After filing for an extension, you have a 6 month time frame to crosscheck all details and ensure that they are exact and correct.

3) No Penalties: If you apply for an extension before 15th of April, you will be not be subjected to late filing penalties. However, applying for an extension does not save your penalties on the taxes you owe. Taxes will still have to be paid on or before the due date to avoid interest and other charges.

How to File a Federal Tax Extension?

Any taxpayer, whether individual or business, can file for a tax extension in one of the following ways:

1) File your extension electronically (E-file)

2) File a paper tax form and submit by mail

If you are an individual filing your personal tax extension, you must file IRS Form 4868. If you are a business entity, you must file IRS Form 7004.

For filing your tax extension, you can take the services of an authorized e-file provider or submit the extension by paper mail.

Précis

Federal Tax Extension is the best option to obtain some extra time to file your tax returns without being subjected to late filing penalties. Individuals as well as business entities can avail this benefit.

TaxExtension.com is an IRS authorized e-file provider that files the federal tax extension forms 4868 and 7004 on behalf of the taxpayers in a secured way. For more information on how to apply for a federal tax extension, visit IRS.gov.