Generally, you need to file your income tax returns in the United States by the due dates; otherwise, a penalty or interest may apply. In certain reporting circumstances these penalties can be huge. If you can not file your income tax return on time you can request IRS for an extension. If you are a resident of Canada, in certain circumstances you may not need to request IRS for an extension of the time limit as you already have an automatic extension.
Let’s look at it step by step.
Requesting IRS for filing due date extension
IRS will charge you a penalty if you fail to file your income tax return by the due date. You can apply to the IRS for an extension of the due date or, in certain circumstances, use the applicable automatic extension.
U.S. Tax filing deadlines in the United States
You need to file your personal income tax return in the United States by April 15th irrespective of your filing status. If the 15th of April falls on a Saturday or Sunday or on a national holiday, then you can file your taxes by the next available business day.
All domestic corporations’ corporate income tax return is due by the 15th day of the fourth month following the tax year-end. If the 15th day of the 4th month falls on a Saturday or Sunday or on a national holiday, then you can file your taxes by the next available business day.
An LLC needs to file its tax return based on the elections made on the filing status. The above due date will apply as per its filing status.
Need more time to file
You can get more time to file your personal taxes in the United States. However, you need to apply before the original due date. The extension to file your taxes does not extend the time to pay your taxes. You need to pay any taxes payable on your return by the original due date.
Penalties for not meeting the due dates
In general, if you fail to meet the due dates, IRS will charge you a penalty which is 5% of the unpaid taxes for each month or part of a month that a tax return is late. However, the maximum penalty is 25% of your unpaid taxes.
An AUTOMATIC Extension of 15th days six months, including the 15th day
26 CFR § 1.6081-5 – Extensions of time to file taxes in the United States in the case of certain partnerships, corporations, and U.S. citizens and U.S. residents.
(1) In the case of a Partnerships, Section 6072(b) generally requires to submit tax returns by the fifteenth day of the third month after the finish of the tax year. However, the Partnership can avail the above automatic extended time to file if the Partnership holds their records and books of record outside of the United States and Puerto Rico;
(2) The automatic extension also applies to Domestic corporations that are situated in the United States and Puerto Rico but transact their business and keep their books of account outside the United States and Puerto Rico;
(3) Foreign corporations having an office or a place to do business within the United States;
(4) A domestic corporation deriving its principal income from the sources in the United States;
(5) A citizen of the United States or a U.S. resident who maintains his/her home and outside of the U.S. or then again Puerto Rico; and
(6) ) A citizen of the United States or a U.S. resident who is serving in the military or the naval force is on duty, regardless of whether forever or for a brief time, outside of the United States and Puerto Rico.
What you need to do to qualify for this automatic extension –
(1) The return should incorporate an assertion expressing that the entity or individual who is claiming the automatic extension is/are meeting the conditions described above; or
(2) If you are still not ok within the automatically extended time limit and want additional time to file, your such request should be indicated on Form 4868 for “Application for Automatic Extension of Time To File a U.S. Individual Income Tax Return,” or on the Form7004, for “Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns,” whichever is applicable. Such requests must be submitted within your automatic extended time limit.
In taxation, every situation is different. In order to take advantage of the above extension or to determine your residency or place of business, you may please contact us or get in touch with your accountant.
Disclaimer: Information in the blog/post/article has been presented for a broad and simple understanding. This is not legal advice. RKB Accounting & Tax Services does not accept any liability for its application in any real situations. You need to contact your accountant or us for further information.