Filed a Tax Extension? Paying Late Can Be Costly

Tax extension filers are not alone

Well, Tax Day has passed, and most Americans are breathing a sigh of relief to have it over with. However, an estimated 10 million taxpayers still have unfinished business. If you filed a 4868, you probably already know that filing a tax extension does not give you more time to pay if you owe taxes.

That’s right, if you filed a tax extension but didn’t pay the full amount you owe, the clock is ticking. The  IRS is charging you interest. The interest the IRS charges on unpaid taxes is lower than the rate on most personal loans or cash advances, so don’t panic.

Tick tock, tick tock

If you filed a tax extension, you have until Oct. 15 to send your tax paperwork to the IRS. Most taxpayers also know that if you file a tax extension and you expect to owe money, you should estimate the amount you owe and send in that much. If your guess is high, you will have the difference refunded to you whenever you do file your taxes.

However, if your guess was low or if you didn’t have enough money to pay you could end up having to pay a penalty. If you didn’t pay anything at all, you could face real trouble — although you probably already know that.

No, not that kind of trouble

If you filed a tax extension but didn’t or couldn’t pay, you will not get sent to jail.

“You can go to jail for not filing a tax return,” said Greg Plechner, certified financial planner with Modera Wealth Management. “You can’t go to jail for not having the money to pay on your tax return.” ... click here to read the rest of the article titled "Filed a Tax Extension? Paying Late Can Be Costly"