Tax extensions: Everything you need to know

Tax season is upon us and there are lots of questions that come along with it. One part of tax filing that can be confusing are tax extensions.

If you have questions about tax extensions, you’ll be able to find all of your answers here.

1. What are they?
2. How can I apply for one?
3. How do I qualify?

HERE’S WHAT HAPPENS AT THE IRS AFTER YOU FILE YOUR TAXES 

1. What are they? 

If you are unable to file your taxes before the April 18 deadline, you can apply for a tax extension. There are some misconceptions surrounding an extension, so it is important to understand exactly what it is.

According to Fox Business, a tax extension does not mean you get an extension on money that you owe to the IRS. Anything that you owe in taxes is still due at the deadline, although there are payment plans available. You must apply for a tax extension by the April 18 deadline.

A tax extension simply gives you more time to complete your return without getting the penalty, which is 5% of your unpaid taxes per month that your return is late, up to 25%.

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How can I apply for one?

Filing for a tax extension is a fairly simple process that can be done electronically. If you are interested in an extension, you will need to fill out Form 4868 using the IRS’s “Free File” tool, according to Fox Business.

How do I qualify?

There are no qualifications to be granted a tax extension, according to Motley Fool. Upon submitting the form, you will receive an additional six months to file your return. There is no section on the form that asks you to give a reason why you cannot file your return on time.

If you are expecting a refund, you will not receive that until your taxes are filed. The quickest way to file your taxes is electronically, according to the IRS.