The last day to file taxes is right around the corner. Taxpayers now have very limited time to file a tax extension if they’re not ready to file their tax returns by April 18. If you need more time to file taxes, you can easily find a tax extension through TurboTax for free and have until October 15 to file your federal or state taxes.
Just note that you will need to file an extension separately for federal and state taxes. Filing an extension only for federal taxes doesn’t automatically give you an extended time to file state taxes and vice versa.
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It’s completely free to file a tax extension through TurboTax. If you prefer filing your extension the old-fashioned way, you’ll need to file Form 4868 on paper and mail it to the Internal Revenue Service. Regardless of how you do it, make sure to submit your extension by April 18.
After filing the extension
Once you file an automatic extension to file your federal or state income tax return, your new deadline will become October 15. You must file your tax return by this date.
One thing you should always keep in mind about tax extensions is that this only gives you additional time to file your tax return. If you’re behind on your tax payments, you must pay your remaining tax liability – or at least the estimation of it – by April 18 regardless. That said, the tax extension is only for filing taxes, not payments.
Taxpayers that file their returns by October 15 and end up owing will pay late payment penalties as well as underpayment penalties if they paid less than 90 percent of their tax liability for that tax year.
Estimating your tax liability
When estimating your total tax liability for the tax year, taking the same approach as estimating quarterly taxes is an effective way to go around it. You don’t need to be a hundred percent sure but once come up with a figure, paying a tad bit more than what you’ve estimated is the safest way.
Another common approach is paying 10 percent more than what you estimated to owe. It’s a lot safer to overpay a little bit than underpay as you’ll get the excess amount paid in your tax refund or forward those funds for the next year’s tax bill.