You may also face a late-payment penalty charge, unless you can prove that you have a reasonable cause for not paying on time. The IRS interest rate on underpayments changes quarterly, but it is usually around 3 percent-adding to your financial burden. You will pay interest on any tax owed that is not paid by April 18 until it is paid. You donвЂ™t want to choose this option unless you absolutely have to. Option B: File an extension and pay later. That way you will avoid the late-payment penalty and failure-to-file penalty. **This may be the best option if you have enough information to estimate the taxes you owe, but you are simply missing a piece of documentation or need time to get your act, aka your documentation, together.ДЄs a freelance business owner, you should be prepared to pay estimated taxes anyway, right? So if missing paperwork is holding you up from submitting your tax return, then filing for an extension makes sense. **Option A: File an extension and pay estimated taxes now. Which option should you choose? LetвЂ™s take a closer look at each one: You must either: a) estimate what you owe and pay it now or b) pay later and be subject to interest on the tax you owe and, potentially, late-payment penalties. 17), it doesnвЂ™t remove the obligation of paying your taxes on time.

While filing an extension buys you six months (making your tax return due on Oct. Be sure to check the specific requirements for filing extensions in the states in which you live and do business. In addition to your federal taxes, you may be required to make separate extension filings for your state tax or other returns specific to the state(s) in which you have a tax nexus. In all seriousness, if you are not submitting your taxes by Tax Day, then you should consider filing Form 4868, the Application for an Automatic Extension of Time, with the IRS.

After all, you know that the April 18 deadline is approaching faster than Kanye can spend 53 million dollars.

If you havenвЂ™t filed your federal income tax return yet, then panic.

Az 2016 tax extension deadline