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Taxpayers who owe taxes and will not have their returns filed before the April 15th deadline could incur both a Failure to File and a Failure to Pay Penalty. The FTF penalty is 5 percent of the unpaid tax for as long as the tax is not paid, and the FTP is 1/2 of 1 percent of the unpaid tax. Taxpayers can mitigate the FTP penalty by filing an extension of time to file. Those who owe but require additional time can request a 120 day extension. For payment extensions, there is no reduction in penalties.
If you file for an extension of time to file and it is approved, then you will be granted a six month extension to file your return. This means that your return won’t be due until October 15th. If you file an extension to pay what you owe, then you have a maximum of 120 days to pay.
To request an extension, mail or electronically submit IRS form 4868 with your return. You can download the form at the IRS website or order it by calling 800-TAX-FORM. If you e-file your return,
you should receive an email acknowledgement of receipt of your return within 72 hours. To request an extension of time to pay, call the IRS at 800-829-1040.
If you do not pay the tax owed before the October 15th deadline for extensions to file or 120 days for extensions to pay, you are officially out of compliance and are thus subject to enforcement action by the IRS. Enforcement action could include the issuance of levies or liens on your assets. Overseas filers are afforded an automatic 2 month extension to file.
An extension of time to file your return is an extension of time to pay. Even if you are approved for an extension to file, you are still required to pay the tax due before the deadline. If you are not sure of how much you will owe, the IRS recommends that you make an estimation and make a payment in that amount. You can mail your payment to the IRS office that services your area or make the payment online using the Electronic Federal Tax Payment System. In order for an extension to be approved, it must be submitted before the April 15th deadline.