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tax tip of the day, something appropriate for the due date
file your returns, even if you owe money and can't pay, or file an extension and tell the IRS you owe the money, especially if you owe a lot
here's the reason, if you owe 10k and don't file a return or and extension that says you owe 10k, then the late filing / payment penalty is 5% per month for 5 months, or 25%
if you file the return or a valid extension and don't pay, the penalty is only 1/2 % per month for 5 months, or 2.5% total
if you owe 10k, you reduce your max late filing / payment penalty from $ 2,500 to $ 250
so tell them you owe the money
file your returns, even if you owe money and can't pay, or file an extension and tell the IRS you owe the money, especially if you owe a lot
here's the reason, if you owe 10k and don't file a return or and extension that says you owe 10k, then the late filing / payment penalty is 5% per month for 5 months, or 25%
if you file the return or a valid extension and don't pay, the penalty is only 1/2 % per month for 5 months, or 2.5% total
if you owe 10k, you reduce your max late filing / payment penalty from $ 2,500 to $ 250
so tell them you owe the money
it'sa
it's a problem if you actually owe a lot of money my friend, they can say your extension was invalid and then assess the 25% penalty instead of 2.5%
it happens, and it's a risk not worth taking
I'd rather err in the opposite direction, say you owe more than you do, no downside at all in doing that
you should file your returns, since it's the law, and taking the foreign earned income exclusion is pretty easy
as far as getting into trouble, I highly doubt it
