Can you file tax extension on turbotax

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After a complicated tax season marked by IRS processing delays and more complicated returns for many following pandemic-related changes to the tax code,  Tax Day is here. 

Monday, April 18 marks the deadline to file and pay any 2021 federal income taxes you owe. If you haven’t filed yet, or did file your return but haven’t paid your balance, now is the time to take action. 

“A lot of tax law has changed in the past year, and there’s a lot of confusing stuff. More time gives you more of a chance of getting it right,” says Michele Cagan, CPA, founder of Single Mom CPA and author of “Debt 101.” 

But don’t panic if you’re still unprepared: the IRS has options to further extend your filing deadline, plus payment plans available if you don’t have enough cash to pay your balance in full before the deadline. 

How to File a Tax Extension

If you need more time to file, request an extension from the IRS to delay your due date until Oct. 17, 2022. Anyone can apply for an automatic extension by filing Form 4868 through the IRS Free File software.

However, if you are able to file and pay your taxes owed today, do it.

You can complete your tax return and submit payment online via the IRS’ Free File service, which is available to filers whose income is $73,000 or below. If you’re ineligible for Free File, you can use an online third-party service such as TurboTax or H&R Block, or submit your return by mail, as long as it’s postmarked by April 18. Otherwise, an extension is a good option.

“A lot of people think that if you file an extension, somehow that puts you at risk for an audit or you get in trouble for filing an extension. That’s not true at all,” says Cagan. 

But you should remember that this is a filing extension only. If you owe the IRS money, you’re still obligated to pay by April 18. Any taxes you owe after April 18 will be subject to interest, which accrues daily, as well as monthly penalties.

Learn more about penalties and interest on the IRS website.

How to file an extension online 

You can file an extension online via IRS’ Free File software for free or you can use a third-party tax software, like Jackson Hewitt or H&R Block. The form will be submitted to the IRS electronically. If you work with a tax professional, may also be able to electronically file an extension on your behalf. 

If you think you’ll owe money when you file, you should submit a payment when you file for an extension, too. The form offers different options for payment, including electronic transfer. 

How to file an extension by mail

Experts recommend filing online if possible, but you may choose to print and manually complete Form 4868 line-by-line using the IRS’ step-by-step instructions. You’ll need to estimate your tax liability to determine if you owe anything when filling out the form. You can submit your payment via check or money order, using the instruction on the form.

When filing for an extension by mail, make sure you have proof that you submitted the form on or before the April 18 deadline to avoid any penalties.

What To Do If You Owe Taxes

When you file your extension, you’ll need to include an estimate of your taxes owed on the form, which can help you determine the payment amount you should submit when filing. Use last year’s tax return, along with your W-2 and forms for other income sources (such as 1099s) to estimate. 

The IRS offers a tax calculator to help you figure out your total tax obligation using your pay statements most recent tax return. To determine what you still owe, subtract any amount you’ve already paid toward taxes.

If you submit your estimated payment through IRS Direct Pay and indicate that the payment is for an extension, the IRS will automatically count your payment as an extension, even if you haven’t filed Form 4868. 

If you don’t have the money to pay what you owe in full right now, any amount that you are able to contribute can help reduce the penalties and interest you’ll be charged in the future.

“If you are in a tough spot and don’t know if you’ll owe because you haven’t had a chance to get your documents together, the best thing to do is to file an extension with both the IRS and your state and make an extension payment — that way you’ll avoid penalties,” says Ally-Jane Ayers, CFP, co-founder and financial planner at Brooklyn FI.

For further flexibility, take time to apply for a short-term payment plan or long-term installment agreement with the IRS to spread your balance out over time with a lower monthly payment. 

If you decide to use a payment plan, complete the application today. You can apply for a plan online and receive an immediate notification of whether you’ve been approved.

What To Do If You Owe State Taxes

Filing a federal tax extension with the IRS only covers your federal tax return. 

However many state tax agencies set their state filing deadlines on or around April 18, too. Check your state’s tax website to find your 2021 state tax due date. In some cases, you’ll need to file for an extension both federally and with your state. 

The guidelines and deadlines can vary by state. For instance, if you are granted a federal tax extension as a North Carolina resdient, you’ll also be automatically granted a state tax extension for North Carolina taxes.  You’ll need to show proof that the extension was approved, and it will be for the same amount of time that the IRS grants — six months (Oct. 17). 

But some states, such as New York, require you to request a separate extension using by filing a form with the state. If you know you need an extension, it’s best to check your state’s requirements now to make sure you file in time. Remember to complete any required documents and keep proof that you submitted.

Whether your state tax extension is automatic or not, state extensions also do not apply for taxes owed. If you think you owe, you’ll need to submit payment of your estimated tax obligation by your state’s tax deadline.

What To Do If You Expect a Refund

Even if you don’t owe any money to the IRS, you should still make sure your return is filed by the deadline to receive your refund — and any stimulus money you may still be owed — as quickly as possible. 

Still, prepare to be patient: The IRS continues to face processing delays (especially if you file by mail) due to its large backlog and implementation of last-minute tax changes. Double check your return for any mistakes or inaccuracies to best ensure it’s processed and your refund issued as quickly as possible.

After you file, you can check the status of your refund using the Where’s My Refund tool on the IRS website.

Bottom Line

Act quickly to file and pay your taxes owed by the tax deadline, but remember to approach your situation with a clear head and know the facts, Ayers says: “Stay calm and lean on the IRS website for help.”

Take time today to develop your action plan. Go ahead and file your return and pay online if you’re able; otherwise, file for an extension until Oct. 17, pay what you can of your estimated balance, and apply for a payment plan if necessary.

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We want to help you make more informed decisions. Some links on this page — clearly marked — may take you to a partner website and may result in us earning a referral commission. For more information, see How We Make Money.

Tax season is officially here. And like last year, experts say complications and delays could mean a longer wait for your federal tax refund.

To avoid a delayed refund, the IRS recommends filing your return early, filing electronically, and choosing to receive your refund via direct deposit to your bank account. Before you file, it’s also important to check for any errors that may lead to delays — especially if you were eligible for advance Child Tax Credit payments or the third stimulus check last Spring. 

Here are a few things to keep in mind as tax season begins, and tips from experts to help you prepare to submit your return. 

What to Know Before Filing Your Taxes

Before you file your tax return, take some time to review your documents and get a sense of how much you have already paid, says Garrett Watson, a senior policy analyst for the Tax Foundation, an independent tax policy nonprofit. This will help determine how much you owe the IRS or how much money you can expect to receive in a refund. Knowing the amount of taxes you’ve already paid can help you address potential problems right away. 

You should also make sure to gather all of the necessary documents before filing. Employers have until Jan. 31 to provide your Form W-2 wage statements, so you may not be able to file today if you’re still waiting. Here are a few common tax records you may need: 

• W-2 from your employer
• Forms 1099 (including 1099-MISC or 1099-INT) for miscellaneous income, including retirement plans and banks. You may receive multiple 1099s — for instance, for any interest you earned on a savings account, income earned as a gig worker, or unemployment benefits you received.
• Form 1098: Mortgage interest statements
• Letter 6419 to reconcile advance Child Tax Credit payments with the amount you’re still owed
• Letter 6475 to reconcile stimulus payments via the Recovery Rebate Credit
• If you bought crypto last year: Information about any taxable cryptocurrency transactions

Expect Delays This Tax Season

Like in 2021, it could take longer than usual to receive your tax refund this year.

“I think the IRS has done a service by warning people upfront about what the process is going to be like this year,” says Janet Holtzblatt, a senior fellow at Urban-Brookings Tax Policy Center. “But it’s not the position that anyone would want their tax agency to be in.”

Advance Child Tax Credit payments, stimulus checks, and other changes to the tax code as a result of the pandemic will drive this year’s delays, Holtzblatt says.  

The best way to avoid delays is by using direct deposit to get your tax refund faster and avoid errors in your return.

“It’s critical this year to avoid a paper tax return whenever possible and file electronically with direct deposit,” IRS Commissioner Charles Rettig recently said in a statement. “And it’s more important than ever to make sure you’re filing an accurate tax return.”

Before submitting your tax return, it’s best to manually review your forms before submitting to account for any errors that could cause delays. Miscalculations or skipping a critical section will mean that the IRS has to manually review it, and you’ll need to submit a correction — which could take longer than usual this year.

Refunds made via direct deposit are received within 21 days for nine out of 10 taxpayers, according to the IRS. Before submitting your return, you can choose direct deposit as your refund method on your tax software. If you work with a tax professional to file your return, make sure to request that they e-file your return. You’ll need to enter your account and routing numbers for the IRS to deposit your refund without any delays. 

Also remember to double check for any errors. If you make a calculation error, have missing information, or suspected identity theft or fraud, your electronic return can get pulled out of the system, manually reviewed, and you’ll need to provide a correction — a process that can stall refunds. 

If you do have an issue, check the IRS website instead of calling. Like last year, Holtzblatt says there will likely be a surge in call volume, which means your chances of live assistance may be slim.

After submitting your tax return, you can use the IRS’ Where’s My Refund tool to check the status of your refund 24 hours after filing electronically or four weeks after mailing your return. 

Be Prepared to Reconcile Payments

A big potential source of this year’s tax delays will be calculation errors — a common tax season problem that Watson says will be even more widespread this year. He predicts that most of these errors will stem from the advance Child Tax Credit payments and third stimulus checks millions of Americans received in 2021.

If you received advance Child Tax Credit payments, make sure you have Letter 6419 — the IRS began sending these letters in late December. It shows how much Child Tax Credit money you have already received via advance payments. You’ll need this to reconcile those payments with the remaining amount you’re eligible to receive when you file.

As for those who were eligible for the third stimulus, or Economic Impact Payments, the IRS will send Letter 6475 in late January. If you never received the third stimulus check, this letter can help you determine if you should claim the Recovery Rebate Credit. 

Some taxpayers may be eligible for more money than they received in the third round of stimulus. That’s because the checks were originally based on your last filed tax return, which may not have represented your financial situation in 2021. Depending on your financial circumstances, you may qualify for a larger payment, which you can claim when you file this year, Holtzblatt says.

However, like last year with the first two stimulus payments, you shouldn’t worry about paying back additional stimulus check money if you were paid more than you were eligible for, Watson says. 

Other Dates to Keep in Mind 

Delays may be inevitable for many taxpayers this year, but filing early and accurately can help you avoid long waits for your refund or the need to amend your return. As you prepare to file your 2021 taxes, here are some other dates to mark on your calendar:

• Jan. 24: First day you can file federal tax returns
• Jan. 31: Deadline for employers to give employees Form W-2 for filing
• April 18: Last day to file your 2021 tax return, request an extension, and pay taxes owed
• April 19: Last day to file your 2021 tax return, request an extension, and pay taxes owed for Massachusetts and Maine residents
• Oct. 17: Due date to file if you request and are granted an extension