As April 15 nears and you get your taxes ready for the IRS, you may find that in some cases, the new federal tax law doesn’t jibe with state laws which makes filing state and federal taxes less than seamless.
If you have trouble with your taxes, you may consider filing for a deadline extension.
Filing a federal extension
Submitting Form 4868 either electronically or via paper will extend your tax filing deadline by six months. You don’t have to state why you need the extension. The IRS will contact you only if the extension is declined.
The important thing to remember is that a filing extension doesn’t get you off the hook for paying your taxes on April 15. Part of Form 4868 is a worksheet to help you estimate the taxes you owe. If you don’t pay them by April 15, you will begin to accrue penalties. The interest rate is generally 5 percent per month or part of a month.
In fact, the IRS suggests that if you have your return finished but you can’t pay your tax, don’t file for an extension. The agency suggests you file your return and pay what you can, then the IRS will work out a payment schedule with you.
The IRS also says:
- Interest accrues not only on the balance but on any unpaid penalties and interest as well
- If you pay through an installment agreement, penalties and interest continue to accrue
- In some cases, the interest on a bank loan or credit card is lower than the interest charged by the IRS
The IRS also has special provisions for those serving in the armed forces and who are stationed outside the U.S.
New Mexico rules
If you have an extension for your federal taxes, you do not need to file one for your state taxes. However, the same rule applies: An extension to file does not equal an extension to pay. You still have to pay your estimated taxes on time.
If you need to file an extension for your state taxes, you can submit Form RPD-41096.
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