Income Tax Filing is an extremely main task and you cannot ignore it any cost. The penalty of neglecting to pay the Income tax can be extremely grave. There is a time limit that one has to follow for filing the income tax but often the public are given the Income tax extension deadline.
The Income tax extension deadline is only given to individuals or businesses that file their tax returns regularly and fill the forms properly. They are only given extension only to make sure that the filing is correct and will give them beneficial terms. The term for the tax extension is maximum six months. Filing for income tax is very easy and trouble-free. Today you also have the facility of filing it online without getting out of your offices or home. You can even file for the taxes before time on the condition that your paper work is thoroughly completed. There are almost more than 20 million individuals and almost five million businesses that file for the income tax extension every year on year.
Therefore, the State governments give the people Income tax extension deadline so that people can follow their taxes. Those who do not file even after the deadline are entitled to pay huge amount of penalties. Tax extensions are given so that you can file the taxes in a more accurate way. The extension gives you an extra time to prepare your statements in a better way and file for the taxes. The last date for businesses to file taxes is March 15 whereas the last for individuals to file the personal income tax is April 15. If the tax is not paid on time then you are entitled to pay a penalty that keeps on increasing month after month till the time your taxes remain unpaid.
After the Income tax extension deadline you also have to pay the interest fee which keeps on accumulating till the time the taxes remain unpaid.
The interest rate is around 0.5% of the tax liability. This keeps on accumulating every month. Therefore it is important to pay your taxes on time so that you may not have to bear unnecessary loses. It is mandatory for every individual to file for the taxes.
A 6-month extension of time to file is not an extension of time to pay. You must make an accurate estimate of your tax and send any necessary payment with your Form 4868 or pay the tax due by credit card. If you find you cannot pay the full amount due with Form 4868, you can still get the extension. You will owe interest on the unpaid amount.
You also may be charged a penalty for paying the tax late unless you have reasonable cause for not paying your tax when due. Interest and penalties are assessed (charged) from the original due date of your return.