If you have an installment agreement with the IRS, it may be confusing to know if you can file for an extension on your taxes. The good news is that you can file for an extension even if you have an installment agreement in place. Here`s what you need to know:
First, it`s important to understand what an installment agreement is. This is an agreement between you and the IRS to pay your tax debt in monthly installments over a period of time. It`s a helpful option if you`re unable to pay your tax bill in full at one time.
Now, let`s talk about filing for an extension. If you don`t think you can file your taxes by the April 15th deadline, you can request an extension by filing Form 4868. This will give you an additional six months to file your taxes. However, it`s important to note that an extension to file doesn`t mean an extension to pay. If you owe taxes, you`ll still need to pay by the April 15th deadline to avoid penalties and interest.
If you have an installment agreement in place and file for an extension, your agreement will continue as usual. You`ll still need to make your monthly payments as scheduled. You`ll also need to estimate your tax liability and pay any remaining balance by the April 15th deadline to avoid penalties and interest.
It`s important to communicate with the IRS if you`re unable to make your monthly payments or if you need to make changes to your installment agreement. The IRS may be willing to work with you if you`re experiencing financial hardship or other extenuating circumstances.
In summary, if you have an installment agreement in place, you can still file for an extension on your taxes. Your installment agreement will continue as usual, and you`ll need to estimate your tax liability and pay any remaining balance by the April 15th deadline to avoid penalties and interest. Communication with the IRS is key if you need to make changes to your installment agreement or if you`re experiencing financial hardship.