More than 14 million taxpayers (including me) requested an extension to file their federal income tax return this year. There’s just about a week left to finish up: October 15 is the last day for most people to file their tax returns for 2018.
Even though filing with an extension isn’t hard, taxpayers can still get caught up in the details as the date approaches. Here are the answers to some of the most popular questions about extensions:
Why isn’t the deadline October 17? I know it’s confusing. Extensions give you six more months to file. And this year, Tax Day fell on Tuesday, April 17 (here’s why). But those extra days in April don’t translate to extra days in October. The deadline is still October 15, six months from the normal Tax Day.
Can you e-file your extended tax return? Yes, you can e-file your tax return with your tax professional, by using your regular tax software, or Internal Revenue Service (IRS) e-file and Free File. If you want to file by paper, you can download your form 1040 as a pdf here.
If I file by mail, where should I file my return? Not all returns go to the same mailing address. Where you file depends on the kind of return, whether you owe taxes and what kind of delivery service you’re using. Read the instructions carefully. You can find out where to mail your form 1040 here.
Remember, your return is only considered timely filed if it’s mailed to the right place by the due date, so double check those addresses. You’ll also want to make sure you have the correct postage.
Does filing an extension give me any extra time to fund my retirement plan? Maybe. Self-employed persons have the opportunity to fund a SEP-IRA, solo 401(k) or SIMPLE-IRA plan through the extension date. (For more on retirement accounts for the self-employed and small businesses, click here.) Check with your tax professional for details.
What about funding my IRA? Typically, your IRA must be funded by Tax Day (the April deadline). But, there’s still some planning that you can do with an extension: You can re-characterize your traditional IRA contribution as a Roth IRA or your Roth IRA contribution as a traditional IRA contribution. The IRA rules can be tricky so again, check with your tax professional for details.
Wait. You said “most people” must file by October 15. Who gets more time? Some extensions are automatic, including:
- Members of the military and others serving in combat zones or hazardous zone areas generally have until at least 180 days after they leave the zone to file returns and pay any taxes due.
- Taxpayers affected by natural disasters may have extra time. In particular, the IRS has extended the deadline for taxpayers in California, North Carolina and South Carolina, and Texas.
If I file my tax return with an extension, won’t that trigger an audit? Contrary to popular belief, filing for an extension isn’t an audit trigger. The IRS understands that there many legitimate reasons why taxpayers may need more time to file. Whatever your reason for not being ready to file in April is yours.
I can’t find the records I need to file my return. What can I do? Look everywhere! Ask your employer and other financial institutions for records (you can find tax records from some financial institutions and payroll online). If you still can’t find your info, you can check out irs.gov/transcript for a record of income which has been reported to the IRS (it’s worth noting that you shouldn’t rely on those records, but it could be a help to plug some holes).
Does more time to file mean that I have more time to pay? Nope. Remember that an extension is an extension of the time to file and not an extension of time to pay. If you expected to owe at tax time, you should have made a payment with your extension request to avoid interest and penalty. The interest rate is the federal short-term rate plus 3%, compounded daily and the late-payment penalty is normally 0.5% per month. (More on those penalties here.)
What if I can’t pay my tax bill? File anyway. If you know that you can’t pay, file anyway. Penalties apply for failure to file and failure to pay. File your return even if you’re going to owe and even if you know that you can’t pay. After you file, there are payment options available—and options when you can’t pay at all. Click here for more info.
How long should I keep my tax returns? You should keep a copy of tax returns and supporting documents for a minimum of three years. If you file a correct and timely tax return, the statute of limitations is generally three years after the date of filing or the due date of your tax return, whichever is later. The statute of limitations for a timely filed 2017 tax return begins to run on April 17, 2018, but a timely return received before the end of the extension period (including any postponement for natural disasters and combat zone extensions noted above) is considered filed on the received date, not on the extended due date. Note that if you file late and do not have an extension, the statute runs three years following your actual (late) filing date.
What if I need help? If you run into trouble, help is available. For most taxpayers, the best number to call is 1.800.829.1040. Customer service representatives are available Monday through Friday, 7 a.m. to 7 p.m. local time, unless otherwise noted. Residents of Alaska and Hawaii should follow Pacific time. Puerto Rico phone lines are open 8 a.m. to 8 p.m. local time.
Soooo I didn’t file for an extension in April. I guess it doesn’t make sense to file now, huh? No, go ahead and file anyway. Remember earlier when I said that penalties apply for failure to file and failure to pay? The more time that you put off filing, the more likely you are to owe more in penalties. And if you haven’t filed at all, you won’t qualify for an installment agreement or other potential relief. So go ahead and file—even if you’re late and even if you can’t pay.