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How to File an Extension on Your 2023 Tax Return

Financial Planning Taxes

A 60-second read by Victoria Cannillo: With the filing due date fast approaching, you are probably in the process of collecting all of your tax-related documents from the past year. Tax returns must be submitted by April 15th this year.  If you realize that you are going to need more time to compile information for your tax return or haven’t received all the documents you need, it will be in your best interest to file a tax extension. This will extend the due date up until October 15, 2024.

How to file a Paper Tax Extension:

To file an extension, you are going to need to fill out Form 4868 [Application for Automatic Extension of Time to File U.S. Individual Income Tax Return]. You can download the form and instructions from the IRS website.

With the form, you also need to send in at least 90% of your estimated tax liability due for the year. To pay by check, mail the form with the check together. Make the check out to United States Treasury. Write your Social Security number, daytime phone number and “2023 Form 4868” on your check. This way, they know that you are sending the check as part of your extension.

When mailing in the tax extension, it is highly recommended that you send it via certified mail or another method that provides you with a tracking number. The envelope needs to be postmarked by April 15th. Check the instructions portion of Form 4868 for the correct mailing address (it varies according to what state you reside in).

 To Prevent any Penalties:

  • Carefully read all instructions and follow all directions on Form 4868.
  • Correctly estimate your tax liability for the year and send in at least 90% of the amount due.

Miscellaneous tips:

  • It is possible to file your extension online. See the IRS website for more details.
  • If you ever feel unsure or concerned about the process, consult a Tax Professional to assist you.

2 Tax-Filing Reminders:

  1. It is important to wait for all your tax documents to arrive before filing.  This is especially true for investment accounts in which 1099s are received.  If you have received “corrected 1099s” in the past, you may choose not to file early to avoid the potential need for an amended return.  Some of these forms come in late February or March.
  2.  You will receive a form 1099-R if any money has been moved out of a retirement account.  How much you will pay in taxes will depend on how the money is moved. You want to make sure any movement out of a retirement account is done properly, and the correct code is applied when you file your taxes.  The code will appear in box 7 of the 1099-R.  For some of the most common codes used on the form and what they mean, read our 1099-R-code blog.

For IRA’s, you may also receive a 5498 when you contribute to your account.

How do I correct an “incorrect” code?  Reach out to your custodian.  You may need to file form 5498 in some circumstances.

As always, please reach out to your tax-planning professional for advice for your specific tax situation.

For any other questions, contact the Baron Financial Group Team.

Disclosure: This is a general communication being provided for informational purposes only. This material is not intended to be relied upon as a forecast, research, tax or investment advice. Please consult your financial planning and tax professional for personal advice.