The Tax Extension deadline for 2021 is October 17, and across the U.S., tax professionals say they are seeing a record number of people filing for extensions.
“Approximately 20 million individuals filed for extensions of time to file their tax returns this past season, a number not seen before,” said Mark Steber, Chief Tax Information Officer at Jackson Hewitt Tax Services.
Local experts say they also saw an increase.
Steber says that might be because the IRS extended the tax deadline during the pandemic.
Taxes can still be submitted after next week's deadline but there are risks.
“They will be at risk for late filing penalties, underpayment penalties and late payment penalties. There's no other extension other than perhaps some of the people who have been adversely affected by some of the natural disasters,” Steber said.
Prior to the extension, people still need to submit an estimate of income, credits, and other documents to avoid penalties.
For those who are filing ahead of the extension deadline, Steber recommends doing it online and as early as possible.
“When you're right up against the wall on the deadline, electronic filing gives you some immediate verification from the IRS and your state that they received your tax return,” he said.
Tax professionals remind people that the extension is to file not an extension to pay, so if you have not yet paid your taxes, there will likely be late payment penalties. Form 3519 can be filled out to avoid late payment penalties.