Filing for an extension?

Question

They say you can file for an automatic extension of 6 months but that you still have to pay the taxes due. Question 1, if I knew how much was due, wouldn't that mean I did my taxes and therefore would not need an extension? Question 2, if I file for an extension, can I elect to make monthly payments like usual?

Answer 1

Hello, Jessica! The bottom line is this: if you owe any additional taxes beyond what you have paid so far (withholdings, etc), they have to be paid by April 17th. Filing the extension is basically your sign of good faith to the IRS that the only reason you did not file by the 17th is that you haven't had a chance to complete your return.

If you cannot file by the 17th and suspect that you owe, then at the very least you need to go to an online tax calculator like the one below and calculate your taxes based on whatever tax data that you DO have (W-2, 1099s, etc). If it says you still owe, file an extension and pay AS MUCH OF YOUR DEBT AS YOU POSSIBLY CAN! Then get your return done as quickly as possible, and you will then know for certain what your final liability is, and whether or not you will to set up monthly payments (called an "Installment Agreement").

As long as you do this, the IRS will credit your account with the extension payment and no penalties or interest will accrue on that amount.

Answer 2

You'd be estimating to figure what taxes you had to have paid when you filed for the extension.

If you file for an extension, you can still set up a payment plan once you file your return if you can't pay it all at once, but it will cost you interest and fees.

Answer 3

You have to pay the entire amount with the extension. People file extensions for various reasons. eg inadequate documentation, time pressure etc. you cannot elect to make monthly payments on an extension.