Tax extensions are there for a reason. Here's a list of everything tax filers need to know about requesting a tax extension when they need more time to file.
[MUSIC PLAYING] TRACY BYRNES: OK. So everyone panics come April 18 this year. I'm not going to get my tax return done in time. What do I do? There are many instances where you can extend it. Lisa Greene-Lewis, CPA and TurboTax expert, is here with us to explain. OK, so first of all, who qualifies for a tax extension?
LISA GREENE-LEWIS: Anyone can file for a tax extension, but one thing to know, that it is an extension to file and not to pay. So if you owe money, you want to pay what you owe, even if you file an extension. And then one thing I was going to bring up, if you have everything together, you should just go ahead and file, especially if you're thinking that it's an extension to pay, and it's really not.
TRACY BYRNES: Right. Because you have to basically figure out how much you owe anyway. So if you've done all the work, you might as well just file the return. That said, if you can't get it together and get it all pretty to present to Uncle Sam, you should file Form 4868, right?
LISA GREENE-LEWIS: Right. It's Form 4868, and you can also electronically file that form with TurboTax Easy Extension.
TRACY BYRNES: And don't some states accept the federal extension? So people should check, right?
LISA GREENE-LEWIS: Right. Depending on your state, if you get a federal extension, then they will automatically extend the state.
TRACY BYRNES: Right. But definitely check that, because if you don't, then you get late file penalties. OK, so paying in the bill, maybe I don't have it down to the number. But as long as I've paid a certain percentage, I should be OK, right?
LISA GREENE-LEWIS: Right. You could pay 90% of what you owe, and then you will be OK.
TRACY BYRNES: So if you file this extension and you don't pay the money, what happens then?
LISA GREENE-LEWIS: So if you don't pay, you're going to see penalties. So the penalty for not paying is half of 1% for every month that you don't pay. And then also, if you miss and don't file an extension, there's a failure to file penalty, and that's 5% percent of what you owe every month.
TRACY BYRNES: Right. So to be clear, the extension date is six months, usually October 15, but again, falls on a weekend, we're at October 17. So the extension is due October 17, 2022. Now, a lot of people think if they're getting money back, they actually don't have to file the extension.
LISA GREENE-LEWIS: If you're getting a refund, you won't see a penalty, but you should still just file the extension anyway. And also, just try to file as soon as possible. If you're getting money back, there is no reason why you should delay.
TRACY BYRNES: Right. Unless, of course, you're waiting for a K-1 or something like that. But just because you're getting money back, you should still file that form. You don't want to get smacked with late filing penalties. So October 17, the 4868, and make sure you get some money in. Lisa Greene-Lewis, thank you so much for taking the time.
LISA GREENE-LEWIS: Thank you for having me. [MUSIC PLAYING]