The federal tax return filing deadline for the 2021 tax year was April 18, 2022. If you missed this deadline and did not already apply for an extension, it’s critical to file your taxes as soon as possible to avoid potential penalties.

Why File for an Extension?

If you are delaying filing your tax return because you owe the IRS more than you can afford, you should know that failing to file your taxes on time can further increase your financial woes. The agency can impose late filing penalties for each month you delay, up to a maximum of 25% of the total amount due.

An extension automatically pushes back the tax filing deadline six months and protects you from being penalized. However, having extra time to file your return does not mean you have the luxury of six additional months to pay any amount due to the IRS. People who owe money must still calculate how much and pay it with Form 4868. Once you complete that step, the IRS will automatically grant your request for an extension.

What If You’re Due to Receive a Tax Refund?

The picture changes somewhat if the IRS owes you a refund. In that case, there is no penalty for failing to file your federal tax return on time, even if you don’t ask for an extension. However, this might not be the case for state income taxes, so check with a knowledgeable accountant.

There’s still an excellent reason to file a federal tax return if you know you have a refund coming – you can’t get your money back until you do. The sooner you file, the sooner you’ll get that extra money in the bank.  

Can You Get Extra Time to Pay Your Taxes?

In some extenuating circumstances, you can file an extension request to pay your taxes with the IRS, but the requirements are stringent. You must:

• Complete and send Form 1127 to the IRS on or before the date that the tax is due.
• Provide a detailed statement of all your assets and liabilities at the end of the previous month, plus an itemized list of money you received and spent for the three months immediately before sending in the extension to pay request.
• Offer proof that paying the amount you owe would represent an excessive hardship.
• Demonstrate that paying your taxes would result in a considerable financial loss and that you don’t have the money to make up the difference by taking out a loan or selling your belongings.

Before approving an extension of time to pay request, the IRS also requires some acceptable form of security, such as a bond, notice of lien, mortgage or other means, depending on your specific situation.

Get Expert Assistance Filing Late Taxes

If you missed the April 18 deadline for filing your 2021 federal tax return and need help getting it done, our team is here for you. We know small business accounting and bookkeeping can be challenging, and falling behind on your taxes is a stressor you don’t need. Fortunately, our tax services can guide you to solutions that minimize your liability with the IRS. Call us at 520-544-0177 to schedule a consultation today!