Federal taxes were due to the IRS by April 18th this year. However, due to circumstances, you may have filed for an extension of time to file your income tax returns. A tax filing extension comes in handy for people who might be traveling during tax season, those that do not have the necessary documents or information to complete their returns or those who simply run out of time.
Your New Tax Deadlines
Individuals and Corporations
Individuals filing for an extension received an extended due date until October 16, 2017. There is an exception for those serving in a war zone or an acknowledged disaster area.
Partnerships and S-Corporations
The 2016 filing deadline for partnerships was March 15, 2017, with an extension length of 6 months. The extended due date is September 15, 2017.
Estates and Trusts
The tax extension period for estates and trusts is 5 ½ months, so extensions are due October 2, 2017.
Late Payments, Interest and Penalties
A taxpayer is required to make full payment of the estimated tax due at the time of the extension request. As Ted Fricke puts it, “when you filed an extension, it was just to file the return, not pay your taxes. If you did not make an estimated tax payment with your extension, you will receive a late payment penalty.”
You will be charged interest for any tax that is not paid by the set due date, even if you have valid reasons for not doing so. The interest continues accumulating until you make the payment. It is compounded daily, but is determined on a quarterly basis. Currently, the rate is equal to the Federal Short-term rate plus 3%.
There is also a late payment penalty normally charged at ½ of 1% of any tax that is not paid by April 18, 2017. The penalty is charged every month or part of a month that has unpaid tax liability. The maximum penalty goes up to 25%. Unlike the interest charges, penalty charges can be omitted if you present valid reasons for your failure to pay on time.
A late filing penalty is incurred if you file your return after the extended deadline. The penalty amounts to 5% of the due amount or part of the month that your return is late. The maximum penalty is 25%.
Contact Fricke & Associates
Let us help you meet the appropriate extended deadline and avoid any additional fees. Contact us today at 770-216-2226 or through our website at www.frickecpa.com for assistance in filing your income tax returns.