Guys - does IRS care a lot about 100% accuracy with form 4868 in section 'estimate of total tax liabiilty for 2020' or not really? I had filed for free and was off by quite a bit but they still accepted the extension - just wondering if that's the norm
Also, I am finalizing everythign but think I owe 12,000 - does that mean late payment penalty will be 1% per month or $120 for 6 months or $720 ? Thank you
From IRS instructions - The late payment penalty is usually ½ of 1% of any tax (other than estimated tax) not paid by the regular due date of your return, which is April 15, 2021. It’s charged for each month or part of a month the tax is unpaid.
Actually I have to 1/2 that number so net late payment penalty will be $360?
Filing the 4868 only helps relieve you of the failure to timely file penalty and has no bearing on the failure to PAY penalty.
According to the instructions for Form 4868, if you file Form 4868 by the regular due date, at least 90% of the tax shown on your filed tax return was paid by the regular due date and the remaining balance is paid with your tax return filed by the extended due date, the IRS will consider this reasonable cause to waive the underpayment penalty that would otherwise apply to the period covered by the extension.
In this case, if you owe and pay $6,000 with your tax return, to avoid an underpayment penalty the tax liability shown on your filed tax return would have to be at least $60,000 with the rest paid by the regular due date, otherwise you would have to provide some other reasonable cause for the IRS to waive the penalty.
There is the failure to file penalty, failure to pay penalty and the Underpayment penalties and the IRS can apply any or all of them to the same return. Filing the extention only gets you extra time to file however if you don't pay a required amount with the extension the other penalties can be added.
Read the rules on page 2 of the extension form: https://www.irs.gov/pub/irs-pdf/f4868.pdf
Read the rules on all penalties here : https://www.irs.gov/payments/penalties
Do I have to file an extension to file in NYS my home state too or the IRS notifies NYS? Thanks
It is now way too late to file any extensions so your question is mute.
@holtaboy wrote:
It's a question for next year
You have to file an extension request for tax year 2022 on or before April 17, 2023. The IRS Form 4868 for tax year 2022 will probably not be available until late February or March 2023.
Do I have to file an extension to file in NYS my home state too or the IRS notifies NYS? Thanks
@holtaboy wrote:
Do I have to file an extension to file in NYS my home state too or the IRS notifies NYS? Thanks
The New York Tax Department does not accept federal Form 4868 in place of an NYS extension request using Form IT-370, Application for Automatic Extension of Time to File for Individuals. Form IT-370 must be filed on or before the filing deadline to receive a six month extension of time to file.