“God put me on this earth to accomplish a certain number of things and right now, I am so far behind I shall never die.” -unknown
What does an extension do?
An extension gives you until October 15th to file without paying a penalty for late filing. This penalty only applies if you owe, and it does not give you an extension on paying. Payment is still due by July 15th. If it turns out that you do owe, and did not prepay your taxes, you will incur a late payment interest/penalty but it pales when compared to the late filing penalty. It costs you nothing and is the safe play.
Do I have to extend if I know I am getting refunds in the federal and all the states I file in?
To be honest: No. If you do not owe anyone, why should they worry? After all, they get to keep all your lovely money! You can only get it back if you file. And after 3 years, it is theirs for keeps. (Exception is VT – they take $50 out of your refund if you do not file or do an extension.)
How do the state extensions function?
Each state has its own individual quirks but basically follow the IRS pattern. The failure to file penalty is generally larger and easier to avoid by just sending in an extension.
How do I find out about my individual state requirements?
Google. But that is also what we are here for. If your state requires an extension, we will send it in for you if we have your information inhouse for each state you worked in. 😀
I usually get a federal refund, but owe my home state, should I be concerned with sending in an estimated payment by April 15th?
We can only answer this based on what most of our clients do. Most will file the extension to avoid the larger penalty, but not sweat the smaller stuff of the failure to pay penalty. For most clients, these individual state penalties average $20-60 but can be as high as $100 or more.
What is the IRS Failure to File penalty?
This is the penalty for not filing your return by the due date (July 15th or October 15th with an extension filed). It is only applied if there is a balance due on your return. The penalty is 5% on the balance that you still owe, calculated per month, but maxed at 25%.
What is the IRS Late Payment penalty?
Think of this as a late payment fee. It is a penalty ranging from ½ to 1% of your unpaid taxes, calculated monthly. It is also maxed out at 25%.
Why do I pay interest on top of the late payment fee?
There are a few variables that take too long to explain here, but basically: The governments expect their money to be sent to them throughout the year (by quarterly estimated payments or paycheck withholding). When you don’t pay on time, the government is loaning you the money, so you get to pay the interest. Penalties are imposed to encourage compliance.
While we sympathize with you over the frustrations of not being able to get everything done and completed on time, we would like to encourage you to still extend with us, rather than go off and find any willing body to prepare your taxes. Joe’s saying is always: “Better to do your taxes late and right, rather than in a rush and wrong. There is another advantage to extensions. You get to talk with us after April 15th when we have more time to answer all your questions, not just the 30 minutes we allow for before April 15th.
We do hundreds of extensions each year, so you are not alone. Many of our clients travel or are from other countries, gathering all the documents is difficult. After tax season, we will take a day or two break, and then pick up where we left off. Those who send in their completed workbook and other information will be put in a queue and kept in order, so still send us your information ASAP.
Basic Extensions are FREE (filing the form 4868 without a tentative screening). If we have all your tax documents inhouse before midnight on July 1st, we will also do a free tentative screening to see if you may owe anything. If you do, we will provide vouchers for Federal and state only.
Our extension policy:
If you have all your forms uploaded to our office by July 1st, 2020 (and we are unable to fit you in for a tax consult before July 15th ) we will do an extension for you with a tentative screening to see if you may owe. (An extension agreement form will be emailed to you to confirm this.) If we do not have all your forms in house by July 1st, we will do the basic filling of extension form 4868.
PA, OH, MI, IN, NY & MO state residents: We do not file municipal extensions. Please check with your local taxing authority to see what you need to do. If you need a copy of the Federal 4868, email us, and we will forward it to you.
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We are unable to answer questions related to the use of tax software programs.
Our mantra is "We never charge to chat." If you are a traveler with questions about your tax home, or have questions about per diems, contracts, or how staffing agencies operate, that phone call is free of charge. - - It probably comes from our years in healthcare... educate! educate! educate!
Open: Monday to Friday – 8:30 a.m. to 4:30 p.m. EST
(Please note: On Fridays our answering service takes calls after 12 pm EST)
The most secure way to send us your documents is to utilize this link that will allow you to select your saved files and upload them via our encrypted site.
Documents are processed within 24 hours EXCEPT ANY DOCUMENTS SENT ON WEEKENDS; they will be processed Monday or Tuesday at the latest.
Mail: 46 St. Mark Rd., Taylors, SC 29687
You will be directed to a separate PayPal portal page to complete the transaction. A PayPal account is not required.
Taxpayers can make electronic debit or credit card payments through our official IRS payment website, Drake e-Payment center, at 1040paytax.com. Convenience fees for credit cards (1.97%) or debit cards ($2.58) will be applied at the time of payment. Use this link to make your payment.