SAN ANTONIO — An extension on your taxes gives you extra time to complete your tax paperwork but there is no way to delay the painful part: Paying.
“They give you six more months to send in your forms and attachments and documents. It is not, and it’s often misunderstood, is not an extension of time to pay taxes if you have a balance or you do owe taxes,” said Mark Steber with Jackson Hewitt Tax Service. “You actually have to work up the numbers and pay any tax due by the midnight deadline this year, April 18 and then send in your paperwork later. In fact, three out of four taxpayers get a refund. If you extend on that, you’re just paying the government to keep your money for a longer time.”
An extension to file is not an extension to pay. You will still need to send the money by April 18. Here is how to estimate if you had no big changes last year:
“Look at your tax return last year to see what amount you owed and you want to send that amount over to the IRS,” said Kemberly Washington, a former IRS agent now with Forbes Advisor.
You will want your payment to be as accurate as possible or prepare to possibly pay even more.
“If you’re not accurate with your taxes, whether you’re following an extension or otherwise, that can trigger a variety of things that range from a simple letter from the IRS asking where a missing item is or why it doesn’t match to something heavier, like a full-blown audit,” Steber said. “If you don’t pay the majority of your taxes in with your extension and that’s about 90 percent, that’s a pretty easy thing for the IRS to catch six months later. Those penalties for late filing, for failure to pay, for failure to pay timely throughout the year, and a whole bunch more can quickly get bigger than the tax liability itself with interest and penalties.”
Those who need more time to pay should consider the IRS’s installment plan but be aware there are fees and interest.
Make sure your 2018 taxes are also filed by April 18, otherwise you risk losing more money.
“You miss out on that tax refund,” Washington said. “The IRS just announced that they had $1.5 billion in estimated tax refunds (from 2018) that’s due to taxpayers. If they don’t file by April 18, they lose it.”
Take these three steps to avoid paying more:
- Make sure your paperwork is accurate.
- File electronically to ensure your paperwork is submitted on time.
- Electronically deposit your refund to get it quickly.
There are plenty of ways to file for free, just make sure you check to see that you qualify:
- Volunteer Income Tax Assistance Program or VITA in San Antonio offers free in-person help to taxpayers that make $55,000 or less. Contact VITA by calling 211.
- You can also use the IRS Free File Program if your income is less than $73,000. It uses free, guided tax preparation software for your federal taxes.
- Military service members and veterans can use the Department of Defense’s MilTax program to file for free. There are no income limits but there are eligibility requirements.
If you have a question for Eyewitness Wants To Know, email us at EWTK@KENS5.com or call us at 210-377-8647.