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Informal Advice on Filing US Tax Extensions

Informal Advice on Filing US Tax Extensions

Programme B
Published by Programme B

How to File Form 4868 – Application for Extension of Time to File US Individual Income Tax Return

 

There are many Canadian citizens who are dual US citizens. For anyone who needs to file US taxes and you’re currently under pressure to meet the deadline, help is at hand.

Form 4868 is the official IRS document that needs to be filed if you intend to defer tax filing. The form is available through the IRS website in a PDF format, in its most up-to-date version. Fortunately, the form does not need to be filed if you make payment using electronic payment options. The IRS automatically processes tax return extensions when part or all of your estimated taxes are paid electronically. It is possible to pay your federal income tax by telephone, or online.

As of April 2021, the IRS permits electronic payments using direct transfers from bank accounts, courtesy of Direct Pay. Other options currently available include debit cards and credit cards. Modern payment options like Paysafecard, a popular method to deposit at online casinos, given its ultra-secure reputation, are not yet accepted. Once tax payments are made by telephone, or online, taxpayers will receive a confirmation number. That confirmation number will need to be entered on Form 4868 as proof that you have made a payment on your estimated taxes.

The IRS cautions against making partial payments on estimated taxes, since the unpaid amount may be subject to penalties or interest charges. Other tax payment options available to filers include money orders and checks. The checks should be made out to United States Treasury, with the correct amount of tax that needs to be paid. Form 4868 must include your Social Security number (SSN), and all details of the form must be filled in.

Your state determines where paper versions of Form 4868 must be filed. All of the offices are located in 3 states, notably North Carolina, Ohio, and Kentucky. It is incumbent upon you as the taxpayer to carefully check which address is appropriate for sending Form 4868. IRS-free file is a cost-effective solution to filing your own taxes. You don’t need to spend hundreds of dollars paying a tax professional to do it for you. The Free File Solutions are provided by several tax filing companies, as a courtesy to taxpayers.

 

The Big Reveal for Filing Tax Extensions in 2021

Just recently, the IRS announced that the tax filing date for individuals has been extended from April 15, 2021, until May 17, 2021. This automatic extension by the IRS negates the need to file your own tax extension this year. The IRS Commissioner, Chuck Rettig stated that ‘…the IRS wants to continue to do everything possible to help taxpayers…’ The electronic filing method remains the preferred method for filing, particularly for taxpayers who are due refunds.

There are no penalties on individual taxpayers who postpone tax filings from the designated date on April 15, 2021, to May 17, 2021. Only after the May filing date will penalties start applying to unfiled tax returns. More good news for individual taxpayers is that no additional forms need to be completed to automatically qualify for this tax-filing extension. However, if you are unable to meet the May 17, 2021 deadline, you can file Form 4868. There is an automatic filing extension until October 15, 2021. 

Tax returns do not need to be filed by a tax professional, bookkeeper, or chartered accountant. If your tax return is relatively simple, you are welcome to use the IRS Free File link (referenced earlier) on the official IRS website. Several important points are worth highlighting: 

  • Your estimated/withholding taxes must be paid for the quarter on April 15, 2021. These taxes are applicable to self-employed persons, rental income, alimony, dividends, or those who are subject to income tax withholding.
  • The extension from May 17 to October 15 does not defer your obligation to pay your federal income taxes. It’s simply a deferral for filing your tax returns.

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