This coming tax season individual income tax returns are due on April 15th, 2020. Do you need more time to file your tax return? No problem! You can request a six-month automatic extension, which will give you until October 15th, 2020 to file.
Although you have an extension to file your tax return, your tax liability must be paid by April 15th, 2020. If your tax liability is not paid by April 15th, 2020, the IRS will assess a failure to pay penalty. The failure to pay penalty is ½ of a percent of your tax liability each month, not to exceed 25% of the total tax liability.
Let’s dispel a few myths about tax return extensions:
Your chances of being audited are unaffected by filing an extension. (Some accountants actually believe your chances of being audited are reduced by filing an extension.)
There are no penalties associated with filing an extension, granted your tax liability is paid in full by April 15th.
There are many positive aspects to filing an extension. An extension can allow you:
More time to collect your tax information.
Your accountant to have more time to thoroughly complete your tax return
More time to fund self employed retirement plans
More time to make various elections
Extensions are quick and easy to file. The same rules apply to corporation tax returns. Calendar year S-Corporations and Partnerships are due March 15th, 2020, but the extension will give you until September 15th, 2020 to file.