Tax Extension is the extra time that an applicant asks from IRS to file the tax returns. There are many reasons due to which tax payers file a tax extension. If a tax payer is unable to fill the forms at the right time, or he is out of town, the tax payer can file can buy some time to file the returns. But many people file extensions because they don’t have money to pay the amount of taxes. IRS has allowed tax extensions to give the tax payer extra time to file. The tax payers should not consider it extra time to pay.
What to do if you don’t have money to pay taxes?
If a tax payer files an extension and later in his return he owes taxes, he might have to pay penalties and interest on the tax due. Tax payer should not mistake the tax extensions as the extra time to pay.
If tax extension is filed for other mentioned reasons, then the tax payer must determine his returns in the best way so that he can get a refund. If you can’t pay taxes, you should not request extensions. IRS offers some payment alternatives. You can request a short extension to pay, of 60 to 120 days; you will still pay penalties and interest, but at a lower rate.
The IRS also offers installment agreements for taxpayers who can’t pay their taxes when they are due. An installment agreement lets you pay a set amount per month until the tax is paid.
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