Filing a tax extension for your 2019 returns

Key Points

  • July 15, 2020 is the filing and payment date for 2019 federal income tax returns due April 15. You can electronically or postmark your paper submission by that date.

  • The new due date to file an extension is July 15, 2020 (extended from April 15, 2020). The extension only goes to Oct.15, 2020.

  • Individuals who filed for an extension need to file their 2019 federal income tax return by October 15, 2020. Returns filed by mail must be postmarked no later than this date. You must file Form 48682 and pay what you estimate you owe to avoid penalties and interest.

  • Small business owners should verify with their tax preparer any questions about how the extension rules apply to their situation.

  • The new deadline to make your IRA contribution for the 2019 tax year is July 15, 2020.

 

Having trouble finishing your taxes? Maybe you’re still waiting for tax information or are still sorting out your deductions. Whatever the case, by filing for a tax extension the IRS will automatically extend the deadline to file your tax forms. Here’s what you need to know.

Tax dates to remember

  • Deadline to file 2019 individual income tax returns normally due April 15
  • Deadline to file for an extension (see Form 4868) and pay any taxes owed to the IRS
  • Deadline for 2019 IRA contributions
  • Consider any relevant state tax due dates
  • Deadline to file 2019 individual income tax returns (if you filed an extension with the IRS)

You still have to pay taxes owed by July 151

Filing for a tax extension only means you can extend the deadline to submit your tax paperwork. If you owe any taxes, payment is still due by July 15.1 Your estimated payment may be reduced by any amounts already paid through withholding or prior estimated tax payments. By filing an extension and making a large enough payment, you may be able to avoid interest charges as well as any IRS penalties related to late filing or late payment3. The penalties for failure to file a tax return or pay taxes when due can increase your tax bill the longer you delay, and can approach 25 percent or more.

How to file a tax extension for an individual

  1. Estimate your tax bill. Do a rough draft of your Form 1040 or consult with your tax preparer to find out what you will owe in taxes this year. If you find you are actually due a refund, you may not need to worry about your tax bill but will want to file for the refund.
  2. Download and read Form 4868. This form will ask you for your estimated total tax liability and total payments (both estimated tax payments and withholding) for 2019 to determine the balance due, if any, with your extension.
  3. Following the Form 4868 instructions, mail or electronically file the extension form with your payment by the July 15 deadline; instructions for each are included on Form 4868. Your tax return will not be due until Oct. 15.4

Small business tax extensions rules

  • If you are self-employed and filing for an extension for your personal taxes, you will have until the Oct. 15 deadline to file the paperwork for your individual tax return. However, any taxes you owe are still due on July 15.
  • You must continue to fund your SIMPLE IRA (savings incentive match plan for employees) until year end.
  • Your individual 401(k) plan must be set up by your business’s fiscal year-end. You can make employer/profit sharing contributions up until your business’s tax filing deadline, plus extensions. Additionally, your individual 401(k) plan operates on a business tax year. For many business owners this is January 1 through December 31, giving your plan an effective date of January 1 of the year the plan is established. 
  • You can set up a SEP plan for a year as late as the due date (including extensions) of your business's income tax return for that year.
  • Remember that the IRS requires that we code SEP or SIMPLE contributions in the calendar year they are received. An employer may, however, report the contribution for the prior plan year when filing their tax return. For more information on the IRS requirements, please see Instructions for Participant on the back of Form 5498 Line 8 (SEP contributions) or Line 9 (SIMPLE contributions).
  • Remember that individuals cannot make prior year contributions to a traditional and/or Roth IRA past the July 15 deadline.
  • Work with your tax preparer to file the correct forms for requesting an extension.

Your advisor and tax preparer can help answer your questions about your tax situation.

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1IRS deadlines for tax statement mailing, individual tax return filing, IRA and Coverdell contributions and estimated tax payments are delayed to the next business day if they fall on a weekend or legal holiday.
2 Application for Automatic Extension of Time to File U.S. Individual Income Tax Return.
3 You may also owe additional tax if there is an underpayment of estimated tax or an underpayment of withholding during the tax year. 
4 The IRS will contact you only if the request is denied.
Ameriprise Financial, Inc. and its affiliates do not offer tax or legal advice. Consumers should consult with their tax advisor or attorney regarding their specific situation.
Ameriprise Financial Services LLC. Member FINRA and SIPC.