The Ultimate Filing Tax Extensions Quiz

By: Staff
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About This Quiz

If you cannot file your federal income tax return by the April 15th deadline, the IRS has a solution for you. Filing Form 4868 will request a six month extension. Knowing the consequences of filing late or not filing at all is important to your financial health. Take this quiz and see how much you know about filing a tax extension.

What should you do if you cannot file your income tax return before the deadline?

You should file for an extension of your tax due date. To extend the deadline, file Form 4868 by the April deadline.

How long may I extend the due date?

If the IRS grants your extension, the extension will be for six months.

How do I file Form 4868?

You may file by regular mail, Internet or phone. To file by Internet, you will need to use a tax software program.

What should I include with Form 4868?

The IRS strongly suggests that you include payment for your estimated tax liability along with the filled Form 4868. A tax extension is not a payment extension, penalties and interest on unpaid taxes will start to accrue after the April deadline.

What are your payment options?

The IRS accepts check and credit card payments.

What is the late-payment penalty?

Even if you file Form 4868 , there may be a late-payment penalty of 0.5 percent of the amount you owe, per month. To avoid the late-payment penalty, pay at least 90 percent of your unpaid tax by the April due date.

What is the filing due date if you live outside the U.S.?

If you live overseas, you automatically have an extra two months to file. You do not need to file Form 4868, but when you file your tax return you must include proof that you live and work outside the country.

If I live in Puerto Rico, do I get an automatic extension?

No, according to the IRS, living in Puerto Rico is not living abroad.

What is the interest rate charged on unpaid tax?

The interest rate is 3 percent plus the federal short-term rate.

If you live in a place that had a disaster, is an extension available?

If you live in a presidentially designated disaster area, a one-year extension is automatic.

Does the IRS ever negotiate the amount of unpaid tax?

If the IRS doubts your ability to ever pay the amount in full, they may accept an offer in compromise.

Is there any way to avoid a tax penalty?

If you can show just cause, the IRS may let the penalty go. Interest is always due on unpaid tax, but the penalty portion of the bill may have some flexibility.

What happens if you do not file your tax return or a Form 4868?

It is illegal to evade taxes and the longer you wait to file the more expensive the consequences. The late-filing payment fee is an additional 4.5 percent of your tax liability, per month. The total penalty for not filing on time is 5 percent of the tax owed for each month up to five months. Of course, interest is also charged for any unpaid tax after the due date.

What does the IRS consider an economic hardship?

If paying your tax will cause you to lose your home, that would be considered an economic hardship.

What do you do if you do not have cash or credit to pay your full tax liability?

You may set up an installment agreement by filing Form 9465.

Does the IRS have additional charges to use an installment agreement?

There are some minor charges to set up the agreement.

What is Form 433F?

Form 433F is a record of your bank accounts, debts and assets. This form must be filed with the IRS if your tax liability is greater than $25,000 and you are applying for an installment agreement.

How do you get an extension for your state income tax?

You must contact your state tax authority.

Is the tax deadline always on April 15?

If April 15 falls on a Saturday or Sunday, the deadline will be the following Monday.

What happens if there is a long line at the post office on the last day to file?

To avoid any late charges, your envelope must be postmarked before midnight.

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