June 15^th is the deadline for submitting your tax return, if you live outside the U.S., and in this case it’s also the last day to file a free tax extension.

If you do not finish your taxes by April 15^th, 2024, you’re not alone. Almost one third of all taxpayers wait until the last minute to file their tax returns, according to financial company IPX1031.

But like it or not, taxes are due today — April 15, 2024 — and if you can’t finish them by midnight, you might have an automatic extension of two months and you can also file a free tax extension to avoid potential penalties.

Along with completing your tax return, the best tax software can also help you file a tax extension, but you can also submit IRS Form 4868 by mail — as long as you get it postmarked either by April 15^th if you live in the US, or by June 15^th if you are eligible for the two moths automatic extension.

US Tax Consultants files the extension until October 15^th for all our clients for free.

How to file a tax extension

If you’re planning to file a tax extension this year, you’ll need to submit Form 4868 to the IRS either by paper or electronically using e-file before the April 15 deadline, so you will get a six months extension until October 15^th or if you are an expat you can file the extension before June 15^th and you will get a 4 months extension until the same day: October 15^th. As long as your electronic extension is submitted by midnight, or your letter is postmarked that day, your extension should be good.

However, if you think that you owe taxes, you’ll need to pay your estimated income tax due quarterly by using Direct Pay, the Electronic Federal Tax Payment System or using a debit or credit card. If you don’t pay your estimated taxes with your extension and owe money, you’ll have to pay interest on that money as well as a potential penalty when you do file.

Some taxpayers are automatically granted more time, until June 15, to file. This includes military personnel who are serving in a combat zone or persons in federally declared disaster areas or, as we said before, US citizens who live outside the country.

Will an extension delay any taxes you owe to the IRS? 

No. Extending your filing deadline doesn’t delay when you have to pay taxes that you may owe. According to the IRS, you need to estimate and pay at least 90% of your tax liability by the deadline to avoid late fees. Otherwise, you will have accrued interest on what you owe, which you’ll eventually have to pay — plus possible penalties — on top of your income taxes. Getting an extension doesn’t change the payment deadline. It just gives you until October to complete the relevant paperwork. You still must submit any amount you owe on time to avoid late penalties.

The late-payment penalty is usually 0.5% per month of the outstanding tax not paid by the filing deadline, maxing out at 25%. The IRS can also issue a late-filing penalty of 5% of the amount due for every month or partial month your tax return is late. If your return is filed more than 60 days after the due date, the minimum late-filing penalty is either $450 or 100% of the unpaid tax (whichever is less).

For individual taxpayers, penalties and interest will stop accruing only when your balance is paid in full.

Some states have later tax return deadlines.

Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming do not collect income taxes.

Of the 41 states that do, most adhere to the April 15 federal filing deadline, and some accept the federal extensions. There are some exceptions, including Delaware, Iowa, Louisiana and Virginia.

To date, residents in other states with federal filing extensions must still file their state returns by April 15, 2024. In most cases, taxpayers can request an automatic filing extension, but they still have to make any outstanding payments by the original deadline.

If you have any further questions or concerns, please, do not hesitate to contact US Tax Consultants by phone +34 915194392, by email info@ustaconsultants.pt or by booking a free consultation with us.