The short answer is no. Before filing for a tax extension, there are some things you need to check.
Applying for a tax extension, it means you apply to get more time your tax return’s filing date. Every person that earns an income in the US must file a tax return. That includes freelancers and self-employed people. It means that everyone in the US-tax system must fill out the 1040 form each year to file their tax return. But, an extension to that deadline is available.
When working as a freelancer or a self-employed person, your to-do list can be crazy, as you juggle multiple gigs and personal tasks simultaneously. Any opportunity to get that tiny bit of extra time is always welcome. IRS tax-filing extensions give you some breathing room to file your taxes if you're running behind on time, or you're chasing down some tax info from a client, for example.
The deadline for any taxpayer to file for an extension is January 31 every year. The tax filing extension is only for filing your annual tax return, it's not an extension on paying the taxes. Even though you file for an extension on filing your tax return, you’ll still need to pay your estimated taxes on the designated dates, if you're self-employed.
There are four dates for paying quarterly estimated taxes for self-employed individuals and freelancers:
But if you need an extension on filing your 1040 form, you can file for one by the January 31 deadline, and you won't need to file until October 15 to file. The first step to file for an extension is filling out the Form 4868.
There are three ways that Form 4868 allows for an automatic tax-filing extension.
Follow these three steps to file for an extension using Form 4868.
You don’t need to give any reason for filing for an extension. The IRS will grant it and will only ask for a reason if your application is initially rejected.
As mentioned, there are no IRS penalties directly associated with an extension of tax filing. If you don’t file your return by the IRS deadline, you can incur a penalty of 5% on your tax due.
There are also penalties for not paying your quarterly estimated tax for that particular period. You can incur a 0.5% to 1% penalty for each month for the unpaid amount, along with interest charges. The maximum penalty is 25% of the estimated tax due. Read more about it in detail here.
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FlyFin's tax CPA team is also here for you 24/7 to answer any tax-related questions. When annual income taxes are due, a FlyFin CPA will be standing by, ready to file a 100% accurate tax return for you.
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