Help! Worried That The 4868 Extension I Filed Through TT Won't Be Valid

[TurboLover2]

I just filed the Free File 4868 Extension through TT to extend the time I have to file my 2019 federal tax return until 10/15/2020.  I got the acknowledgement that it was accepted.

When I filed it, I filled in everything correctly except the "estimated" amount of tax due and the taxes already paid.  I put in zero for both of those amounts even though I already did pay some of the taxes through estimated tax, and I also expect to owe additional tax.

The reason I did that was because I did not want to pay the additional tax due at the time I was filing that online form but wanted to pay it through my EFTPS account prior to 7/15/2020.  So I put zero for those amounts thinking I was paying zero with that form so that was the correct amount to put down when I eFiled that form.

I still plan to pay the additional tax due by 7/15/2020.  There is an option in EFTPS to choose "Extension" for the 1040 when you pay it, and that is the option I plan to use.

But the amount I pay won't match the amount on the 4868 I filed through TT because that amount will show zero.

Is this going to cause me a problem?  My biggest concern is that it will make the extension invalid and when I later file my 1040 by 10/15/2020 I will be subject to a late filing fee.  Really concerned about that because a lot of tax is due. 

This is obviously a question that requires specific knowledge.  Please respond only if you are sure of the answer as I don't want to leave this to a guess!

Thank you for any help!

[CatinaT1 · Accepted solution]

You do not need to worry.  As long as you received the acknowledgement your extension is valid, regardless of the amounts you put.  Those are only estimates and not something that will cause any problems when you go to actually file your return.  

Also, making the payment in EFTPS will automatically trigger an extension as well.  So you are double covered!

[TurboLover2]

Thank you CatinaT1.

I think you are right about triggering the automatic extension after making the payment through EFTPS, since I came to that same conclusion after reading Form 4868 instructions on the IRS site.

And as you mentioned, I suspected that the "estimates" I gave on the eFiled 4868 were not important since the important amount is the amount you actually pay. 

But I was surprised to see this warning in the instructions:

"CAUTION: Make your estimate as accurate as you can with the information you have.  If we later find that the estimate wasn't reasonable, the extension will be null and void. "

I was actually pretty shocked to see that!  Did not expect that would make any difference.  So that may mean that that at least the extension I eFiled yesterday might be considered null and void.

My ASSUMPTION is that the fact that I today PAID the expected balance due for 2019 as payment with "1040 Extension" on EFTPS will automatically create a valid extension in spite of the fact that the eFiled extension may be considered null and void.  But that is only an assumption.  And clearly my other assumption was not correct so who knows.

So here is my plan.  Even though it SEEMS like I should be covered at this point, I'm not SURE if I am doubly covered, singly covered or not covered at all.   The only other thing I can think of that I can do to make it even more likely I am covered is to mail a paper 4868 out by 7/15/2020 with the corrected numbers on it.  And as much as I HATE mailing stuff, that's what I plan to do.

If that doesn't cover me, I don't know what will!

Thanks again for your help.  Your conclusion is probably right, but can't hurt more than the price of a stamp to wear both a belt and suspenders. 😄

God help me survive this tax season!

[RobertG]

Your assumption is correct.

Paying your taxes validates your extension.

The IRS rarely invalidates an extension, only in cases where people later file owing lots of money.

Even if your extension is invalid, all penalties are a percentage of what you owe.  Nothing owed, no penalty. 

[TurboLover2]

Thank you RobertG.  That's an important point.

The IRS instructions for 4868 say the following:

Late Filing Penalty
A late filing penalty is usually charged if your return is filed after the
due date (including extensions). The penalty is usually 5% of the
amount due for each month or part of a month your return is late.
The maximum penalty is 25%. If your return is more than 60 days
late, the minimum penalty is $330 (adjusted for inflation) or the
balance of the tax due on your return, whichever is smaller.

I'm a little confused by the language "5% of the amount due."

Of what amount due?  It could mean more than one thing.  Does it mean 5% of:

1. the balance still remaining at any time after the 7/15/2020 payment due date?

2. the balance still remaining at the time the return is finally filed?

3. the original full amount of tax due on the return whether already paid or not?

4. some other amount?

I think at least the first three of these interpretations could be justified just reading the instructions.  Number 3 is just scary, and it could be interpreted to mean that ("the amount due").  It doesn't say the balance due, it says the amount due.  So it seems unclear as to which interpretation is right.

Can you clarify the amount on which the late filing (not late payment) penalty is imposed based on the the possible interpretations I enumerated above?  Which of these is correct?

With that question in mind, assume that I pay at least the full balance due for my 2019 1040 by 7/15/2020 so that no additional balance is due after that date.  Does that mean that no matter when the return is filed, that there will never be a late filing penalty?  If so what is to stop someone from filing even after the extension expires (not that I intend to do that since I don't have any reason not to file before the extension ends).

Thank you for helping me understand this.  There are some big numbers involved on this return and I don't want any nasty penalty surprises due to a silly mistake on the 4868 even after I pay everything on time.  So I need to be completely sure that I am not going to incur any late filing penalties.

[Nkalipi]

@TurboLover2 ,

what happened after you did the payment in EFTPS?

did it cause any mix up with the form that you already filed?