This is my first time filing an extension due to some circumstances that happen.
I filed an extension for 2023 return. It's approved but my question is about the balance due on an estimated return??
I wanted to more research on what that was but by now I'm sure that date has passed and I figured I was going to get notified on how I would make that payment.
I want to file this weekend but well I run into any issues or can I file as normal? Never been through a situation like this filing super late.
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Hi @Eugene1980,
Thanks for your question!
I'd like to explain a few different things.
I hope this info is helpful. I'll keep eyes on your post today in case you have any follow-up questions. Thanks again!
You can file as normal, but if you expect to have a balance due you will want to pay that as soon as possible to curtail any penalties and interest. You can pay here Pay Estimated Taxes . Indicate that the payment is for form 1040 for tax year 2023.
The extension is an extension of time to file, not time to pay. This is confusing, but basically the IRS considers the tax system a "pay as you go" system. If you end up owing more than $1,000, they will assess penalties and interest from April 15th forward.
May not be good news, but hope it helps!
Cindy
Hi, Eugene1980,
Don't worry too much about how the estimated balance due on your extension was calculated. It was just an estimate and you can move forward with the final return and pay your taxes according to the final tax return balance due or refund. Where the balance due on the estimate will be important is whether or not you paid your actual taxes due on or before the due date. An extension to file is not an extension to pay, and your taxes do need to be paid timely to avoid the "failure to pay penalty."
The failure to pay tax penalty is 0.5% of the tax you owe per month or part of a month, but it also caps at 25% of the tax due. If you set up an IRS installment agreement, the IRS will reduce your failure to pay penalty to 0.25% of the tax you owe while the installment agreement is in effect. This article goes more in-depth. Great job getting that first extension filed!
Hope this helps!
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Regards,
Karen
I am sorry to hear that life has taken over. First, I would encourage you to complete the tax filing as quickly as possible, as you wrote that you will try to file soon, and then make the payment through Turbo Tax in Step 2 of Checkout. You should have no issues in doing so.
One area that you need to pay attention to is that you should check that no extension payment shows on the tax return, as you did not make any payment.
When in Turbo Tax Choose:
1. Deductions and Credits
2. Then scroll way down to Estimates and Other Taxes Paid
3. Other Income Taxes - Click the Start or Update button
4. Next page second section Payments with Extension
5. Open the Federal and make sure there is no payment there and if so, then remove it.
The standard tax extension, which you filed, allows you to file your tax return after the usual deadline. However, it doesn't buy you more time to pay any taxes you may owe.
Penalties and interest are based on how much you owe and for how long.
Interest on unpaid tax compounds daily from the original due date of the return until the date you pay in full. This results in a daily recalculation of the principal amount plus accrued interest.
Good job on filing the extension though. Without an extension, the Late Filing Penalty would have applied. Late filing penalties can add 25% to your tax bill.
Thank you for the opportunity to answer your questions @Eugene1980
All the best,
Marc T.
TurboTax Live Tax Expert
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