| | |

The Clock’s Ticking: Your Last-Minute Guide to Tax Extensions and Payments

Tick, tock. It is Friday; the weekend is upon us!

And so is Tax Day, April 15th.

The deadline is less than 72 hours away, and this Monday may feel like a countdown to doomsday for taxpayers who need an extension and owe taxes.

The stroke of midnight on April 15 doesn’t have to spell disaster if you know the rules for filing your extension and paying your income tax.

Let’s unravel the mysteries

  • Filing an Extension
  • Your tax payment obligations
  • Your cost if you do not pay 100% of your tax on April 15th

Filing for More Time: The How-To

The big question: “I need to file an extension. How do I do it?”

  • Submit Form 4868 to the IRS before the April 15th deadline.
    • Electronically through most tax software programs or;

The magic of this form?

Moves the filing deadline to October 15th.

Paying Your Taxes: Do I Have To?

Now, onto the elephant in the room: “Do I have to pay all the tax now?”

In a word, YES.

  • The extension buys you time to file, not to pay.
  • Estimate what you owe and pay by April 15th to avoid penalties and interest.

Think of it as leaving a deposit for a hotel room you haven’t checked into yet; it ensures your reservation doesn’t get canceled.

Penalties: Sure, I want to throw money away, said no one!

“What will it cost me?”

If you miss the payment deadline, you’ll be subject to a late payment penalty of 0.5% per month on the unpaid tax amount.

PLUS—there’s also interest compounding daily.

The rate? The federal short-term rate plus 3%. (7.89% April 2024)

It’s like a snowball rolling downhill, growing faster with every moment of delay.

Strategize to Minimize

The key to minimizing costs?

Strategize. If you can’t pay the total amount,

  • Pay what you can by April 15th to reduce the penalties and interest on the balance.
  • If you need more time to pay off your tax debt, consider setting up a payment plan with the IRS. It’s like negotiating a peace treaty with the IRS—everyone’s happier when there’s a plan in place.

Have questions about deductions?

With Tax Day looming, remember that extensions are a tool, paying what you owe is a must, and making the most of your deductions is your right.

You may be wondering:

  • Can I deduct the bill for the happy hour cocktails watching the Texas sunset I enjoyed with my spouse last night?
  • Can I put my luxury car through the business?
  • Can I fly first class to a conference and write it off?

Our Savvy CPA would answer yes, yes, and yes. (With the proper documentation)

Paying less in tax doesn’t have to be complicated.

(And it’s not illegal either)

CLICK HERE to read more about deductions.

Navigating the Maze with a Pro

Still feeling overwhelmed?  

Perhaps you are!

That’s where a Savvy CPA Team comes in. Think of them as your guide through the tax jungle, slashing through red tape and deciphering the arcane runes of tax law.

With their expertise, you can navigate this season’s challenges with confidence and emerge on the other side, financially wiser and ready to take on the world.

Want to hire us? Then Click HERE to SCHEDULE an APPOINTMENT

 The opinions expressed in this material are for general informational purposes only and are not a substitute for professional advice.  Individual circumstances do vary. Independent Financial Group (IFG) does not give tax advice. IFG Registered Representatives (RR) do not provide tax advice while acting as a RR.

Similar Posts

  • | |

    Why is “The Bachelor” such a popular TV Show?

    Is it the ability to live in a fantasy world versus the reality that shows a record amount of unmarried adults today in their 20’s and early 30’s ? Today’s young men and women are independent, college educated, and unmarried versus earlier generations of American men and women in their age group. If the trends…

  • | | | |

    A Dash of Humor in the Grocery Aisle: Navigating Food Price Inflation with a Smile

    Hello, budget-conscious gastronomes!  Ever feel like your grocery bill is on a stealth mission to crush your wallet? You’re not alone if your receipts look longer than a Tolkien novel.  Let’s sprinkle a little humor and some healthy advice into the mix as we explore the world of rising food prices. During the 2020 election,…

  • |

    Wasted Time

    What is wasted time?
    Unscheduled, unplanned time doing the simple things of life
    As kids out summers were spent riding our bikes, playing in the creek or playing any game we could make up. All of this was outside and required very little parental supervision.
    Ain’t it funny how the best days of my life was all that wasted time
    – lyric from Keith Urban’s song – Wasted Time
    Today, I observe adults and children over scheduled with activities and over connected with every electronic device possible. Wasted time is where creativity is created.
    We are the “Attachment Generation”.
    Based on my observation about us becoming the “Attachement Generation”, I began to pose this question to friends and clients in my conversations.
    “What is your daily routine and how connected are you”.
    The #1 answer was – immediately when I get up or I take my phone to bed with me.
    I would get the answers and ask my favorite question – why?
    Why do you have to keep your phone with you, even taking it to bed?
    Why do you immediately look at it when you wake up, no matter the time of the night?
    They answered with various reasons that attempted to make the attachment to their phone seem normal.
    This simple idea of not having your smart phone with you 365/24/7 caused people stress.
    “When people are so plugged into their devices around the clock, they often lose the ability to be fully present to themselves and to other people,” says Jeffrey Rossman, Ph.D., director of Life Management ar Canyon Ranch in Lenox, Massachusetts. “It negatively impacts our peace of mind and relationships with others.”
    When is the last time you had “Wasted Time?”
    If “I can’t remember” is your answer then you have become part of the Attachment Generation. It is time for a digital detox and some “Wasted Time”.
    Take my seven steps toward finding your Wasted Time.
    1. Let go of the phone – start with taking it out of the bed. Your phone needs to sleep in the other room, not in the bed or on the bedside table. I made this change and the results are positive. (the phone was on the bedside table)

    2. Don’t touch your phone for the first 30 minutes of your day. Let your mind and your body refresh from the night’s sleep.

    3. Eliminate all of the “push” notifications on your phone and your desktop. This also includes your watch. I see many people distracted and looking at their smart watch for the text notifications during a meeting. It is unprofessional and inconsiderate.

    4. Drive your car without looking at your phone at stop lights. (No texting should not even be mentioned)

    5. Stop using your phone to occupy all of your free time. If you are standing in line at the grocery store, it is Ok to let your mind be unoccupied.

    6. Meals are Digital Free.

    7. Plan some wasted time each day without a screen in front of you. That includes a TV. Go workout, take a walk or have a conversation with your spouse, your children or take a bottle of wine and go visit a neighbor. I prefer reds however a chilled white will work this summer.
    Be honest
    You probably use your smartphone way more than you should, but you’re far from alone. It’s addictive checking social media, playing games and of course just staring down at it when you’re in a socially awkward situation.
    Try either taking the Apps off your phone or try one of these six apps to break your addiction.
    Tell me about your results of finding your Wasted Time.

  • |

    ASKING FOR A FRIEND

    Do you have internet? Just asking for a friend. Some days I think we all wished that Al Gore had skipped inventing the internet. (Dad humor in case you don’t get the joke). In case you think it is just a joke Al Gore was a tech geek and his influence on Congress was important…