Robert J. Fedor, Esq., L.L.C.

Tardy taxpayers advised to file for extension

It's been a chaotic and stressful last few months. Your father passed away in January and you welcomed your third child into your family in February. On top of everything, your demanding job asked you to return to work after only six weeks of maternity leave and you've been struggling with the loss of your loved one while also trying to tend to your family and meet important work deadlines. One day, you and your husband look at the calendar and realize that it's April 10 and taxes are due in a mere five days.

Individuals who find themselves in a similar situation are likely to panic. Those who take no action and miss the April 15 deadline will be subject to fines and penalties including a late filing fee which is factored each month at five percent of a taxpayer's total unpaid tax balance. For those who have yet to complete or even begin gathering important tax documents, it's wise to file for a tax extension.

The IRS estimates that some 10 million taxpayers will file for a tax extension this year. Filing for an extension is easy with several options available to taxpayers online and at no charge. Taxpayers are able to request an extension up until 12 midnight on April 15. While some believe filing for an extension automatically puts a taxpayer at an increased risk for being audited, there is no evidence to support this theory.

It doesn't matter why an individual may need to file for a tax extension, no one asks. There are, however, some important steps a taxpayer must take when doing so. An extension provides a taxpayer six additional months from the date April 15 to file their taxes. The April 15 date, however, is still the deadline to pay taxes. Therefore, if a taxpayer believes he or she will end up owing the IRS money, it's best to make at least a partial payment by the April 15 deadline to avoid paying additional penalties and interest.

Taxpayers who fail to meet the tax deadline or file for an extension will be subject to penalties and fines. In some cases, a taxpayer may also be subject to criminal IRS charges. Those who find themselves in this type of situation would be wise to consult a criminal attorney.

Source: Forbes, "Not Ready To File Your Taxes? Don't Stress Out, File For Extension," Kelly Phillips Erb, April 5, 2014

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