It is a critical time of year for tax returns. If you have not started your tax return filing yet, you are running out of time. With less than a week left before the April 15th deadline for tax return filing, you need to understand the difference between mailing in your tax extension versus e-filing it directly online.
Why File an Extension?
First, before you choose your method of filing, you should know the specific reasons why it is good to file an extension. By filing an extension, you receive six months of additional time to file your tax return. If approved, which an overwhelming majority of extensions are, you can avoid the rush of tax season currently in full swing. With the ability to take your time with tax preparation, you can ensure a complete and accurate return, a good way to avoid IRS red flags and potential audits.
What an extension also does is help you avoid some hefty penalties for not filing your return. If you file an extension but do not pay at least 90% of your taxes, you will be assessed a payment penalty of 0.5% per month. Without an extension, your penalty increases dramatically to 5% per month, increasing gradually up to 25%. It’s clear that getting an extension is preferable to paying costly penalties or filing a rushed tax return.
If you decide to mail in your tax extension request (Form 4868), you must have it post-marked by April 15 in order to have it considered as arriving on time for the extension. It will also need to be properly addressed, to the correct processing center, and have the correct amount of postage to be considered as delivered on time. Depending on which state you are filing from, there are several different IRS processing centers listed on the last page of Form 4868 that you will need to check.
You can also send Form 4868 by registered or certified mail, with the registration or postmarked receipt, which would act as proof of postmarking for deadline purposes. Private delivery services such as UPS or FedEx are only allowed in certain circumstances and may not be sent to a Post Office (P.O.) box.
In order to file your extension online (i.e. electronically), it’s recommended that you use your home computer, where the Internet connection is secure. Make sure that you have at least 60 minutes before the midnight e-file deadline on April 15, to ensure that you can complete the form in time. It’s also in your best interest to use an Authorized IRS e-file Provider, so your personal information is kept secure and shared only with the IRS.
The online filing process for a tax extension is relatively simple, and many taxpayers find they can complete it in 10-15 minutes, without the help of a tax professional. Once you enter your information and submit it online, it will be electronically transmitted directly to the IRS. Then you will receive a confirmation email as soon as the IRS responds to your request.
Filing an extension online is easy and provides great peace of mind. Plus, with e-file, you have until midnight on April 15 and your extension will still be considered on time.