 Internal Revenue Service IRS tax news. Get an automatic six more months to file. All taxpayers can use IRS free file to request an extension, but first an attempt at a joke I apologize in advance. The IRS is trying to take down my business again, but I won't go silently into that good night. I will sit here on YouTube, heroically babbling and complaining about my taxes until this cold, wet microphone dies in my bare hands due to being bombarded with too much spittle. That'll show them. IR2022-71, March 29, 2022, Washington. The Internal Revenue Service reminds taxpayers that if they're unable to file their tax return by this year's April 18 deadline, there's an easy online option to get more time to complete their return. That's basically filing the extension here. A couple things to remember. The reason that we're filing the tax return and paying the tax is to avoid the sticks that the IRS wields and those sticks have to do with penalties and interest. There's two different sticks that we're trying to avoid that they can hit you with here. One is for the late filing penalty and then the interest imposed on that and the other is the late payment penalty and the interest imposed on that. So if you have a filing requirement that you're going to be extending but you owe money at the same time, that might then avoid the stick and reduce the penalties for the late filing, but they also still want their money on time. Remembering that how the tax returns basically work or how the IRS wants to get paid is, for example, in tax year 2021, they want to get paid during the year, which most people do with the W-2 withholdings. We shoot to withhold a little bit more, not just because we want to get a refund at tax time, but because we want to avoid the stick of penalties and interest for late payments or under payments. If you're making actual payments to the IRS, you might have that last payment that's going to be made for tax year 2021 and 2022, for example, and just note that if you file an extension, that doesn't mean, of course, that the IRS doesn't want that payment. You also might be asking, well, what if I switch to a Schedule C type of business and I don't know how much I owe them because I haven't got my bookkeeping straight and I don't have the paperwork to basically figure out how much I owe. The point is that we need to estimate it because they want to get paid early. They want to get paid as soon as possible, so we've got to estimate in some way how much we owe them, again, to avoid the penalties and interest. So taxpayers who need more time to complete their return can request an automatic six-month extension to file. An extension allows for extra time to gather, prepare, and file paperwork with the IRS. As however, taxpayers should be aware that an extension to file their return doesn't grant them an extension to pay their taxes. They should estimate and pay any owe taxes by their regular deadline to help avoid possible penalties and interest. They must file their extension no later than the regular due date of their return. The free file and extension form for free individual tax filers, regardless of income, can use IRS free file to electronically request an automatic tax filing extension. So you can go to the free file to do the extension process. It should be a pretty easy process typically to file the extension. The fastest and easiest way to get an extension is through IRS free file on irs.gov, irs.govv, irs.govv, v for victory over the tax preparation. Okay, taxpayers can electronically request an extension on form 4868. There's a link to that here. Filing this form gives taxpayers until October 17th to file their tax return to get the extension. Taxpayers must estimate their tax liability on this form and should timely pay any amount due. Get an extension when making a payment. Other fast, free, and easy ways to get an extension include using the IRS direct pay, the electronic federal taxpayer payment system, or by paying with a credit card or debit credit card or debit card or digital wallet. So if you owe money when you're filing the extension, then you can basically just pay them with the online kind of formats, the direct pay and so on and so forth. And as long as you assign it to the proper place, meaning an extension for tax year 2021, that in essence will automatically file the extension as well. So if you owe money, that's another fairly easy way that you could basically process the payment and file the extension in that format. There's no need to file a separate form 4868 extension request when making an electronic payment and indicating it's for an extension. By the way, you might be asking, well, what if the IRS owes me money? I expect a refund. Then the extension is not as big a deal to the IRS because if you don't file and they pay you later, then you basically gave them a loan. That's not as big a problem for them. If you owe them money, it is a problem because of the time value of money. They want their money sooner. So the IRS will automatically count it as an extension. So important reminders on extensions. The IRS reminds taxpayers that a request for an extension provides extra time to file a tax return, but not they're emphasizing this again. They already said this, but not extra time to pay any taxes. Payments are still due by the original due deadline. Taxpayers should file even if they can't pay the full amount by filing either a return on time or requesting an extension by the April 18th filing deadline. Avoid the late filing penalty, which can be 10 times as costly as the penalty for not paying. Taxpayers who pay as much as they can by the due date reduce the overall amount subject to penalty and interest charges. So obviously they're incentivizing people to pay if they can pay what is due when it is due by assigning penalties and interest. So you would be better off due to penalties and interest paying what you owe when it is owed. But if you can't, then you want to go on an extension. And if you can't pay and you need to file like a payment plan type of thing, then you want to set that up because again, those types of things help you to be in compliance. And that's what the IRS is trying to incentivize. And therefore you're going to be reducing penalties and interest to do those kinds of things. So the interest rate is currently 4% per year compounded daily. The late filing penalty is generally 5% per month. And the late payment penalty is normally 0.5% per month. The IRS will work with taxpayers who cannot pay the full amount of tax they owe other options to pay such as getting a loan or paying by credit card may help resolve a tax debt. Most people can set up a payment plan on irs.gov, irs.gov, gov for victory over the taxes to pay off their balance over time. Other automatic extensions. Certain eligible taxpayers get more time to file without having to ask for an extension. These include U.S. citizens and resident aliens who live and work outside the United States in Puerto Rico get an automatic two month extension to file their tax returns. They have until June 15th to file. However, tax payments are still due April 18th or interest will be charged. Members of the military on duty outside the United States and Puerto Rico also receive an automatic two month extension to file. Those serving in combat zones have up to 180 days after they leave the combat zone to file returns and pay any taxes due. So if you're in the military and in a combat zone, thank you for your service. The iris is gracious enough to extend the due date a little bit until your life is in danger, which is nice. So details are available in publication three armed forces tax guide. There's a link to that here. When the president makes a disaster area declaration, the irs can postpone certain taxpayer deadlines for residents and businesses in the affected area. People can find information on the most recent tax relief for disaster situations on the irs website. The deadline to submit 2021 tax returns or an extension to file and pay tax owed this year falls on April 18th. Instead of April 15th because of the Emancipation Day holiday in the District of Columbia. Taxpayers in Maine and Massachusetts have until April 19th. What? What's with that? Maine and Massachusetts having until April 19th. Apply it to the whole country. Why don't you like you did with the Emancipation Day? That's what I say, but no one listens to me. Whatever, but in any case, if you're in Maine and Massachusetts, you got until April 19th, 2022 to file their returns due to the Patriots Day holiday in those states. And there'll be a link to some of this stuff here. There'll be a link to this in the description.