Alabama filers automatically qualify for tax extension
Alabama Extension
Alabama and other parts of the nation experienced natural disasters within the last year. Because of this, the state is one of several areas automatically receiving a filing extension for federal income taxes, according to Portia Johnson, an Alabama Cooperative Extension System financial resource management specialist. “Alabamians automatically have until May 1 to complete their 2024 federal income tax returns and submit tax payments for 2024 tax year,” Johnson said. “Whether you are an individual or business filer, you automatically get the extra time without having to submit a request. The only requirement is that your address of record with the IRS must be in the disaster area – and in this case Alabama is a disaster area.” Typically, the April 15 deadline is a hard, fast deadline that Alabama residents do not want to miss, as late penalties for both federal and state taxes are possible. However, if filers anticipate needing additional time to complete taxes beyond May 1, they need to request an extension.
Requesting an extension
Anyone can request an extension for both filings and payments.
When submitting federal taxes, Johnson said there are three ways to submit an extension request. Through the Internal Revenue Service’s Free File there is an option to submit a filing extension request online. A completed copy of IRS Form 4868 can also be mailed in, but make sure to factor in mailing time when using this option. Johnson said filers who need a tax payment extension can complete that paperwork in the online payment portal at irs.gov/payments. When submitting payments before April 15, there is a box to click to request an extension.
“State taxes are due April 15 yearly, but individual income tax filers receive an automatic filing extension to Oct. 15, so no action or form is needed,” Johnson said. “However, there is no extension for payments if you owe taxes. So, it is wise to make a payment plan. Contact the Alabama Department of Revenue at myalabamataxes.alabama. gov or 334-242-1220.”
Late penalties
On a federal level, a late-filing penalty is incurred by those who submit their tax returns more than 60 days late without requesting an extension. There is a penalty of $510 or the entire amount of the tax return, whichever one is lower. There can also be a penalty for late tax payments. For each month that outstanding taxes are unpaid, 0.5% of the unpaid amount – up to 25% of the amount – is charged, plus interest.
In Alabama, there is also a penalty for late payments. Johnson said it is either 10% of the tax due or $50 – whichever is greater. If taxes are not paid, the government may seize assets through a tax levy. This means they could garnish wages and seize money from bank accounts, future tax refunds and other garnishments.
“Notices are typically sent to late payers, and it is unwise to ignore these,” Johnson said. “Communication is key. Contact the IRS or the Alabama Department of Revenue to arrange a payment agreement or installment payments.”
Tax-preparation assistance
There are several organizations that offer tax assistance. For example, the IRS partners with organizations to offer programs such as Volunteer Income Tax Assistance and Tax Counseling for the Elderly. VITA offers tax-preparation assistance to people making $67,000 or less annually, people with disabilities and people who speak limited English. TCE helps filers 60 years or older and specializes in questions related to pensions and retirement. For information on these and other programs, see “Tax-Preparation Assistance” at aces.edu.
More information
Want to prepare better for next time? Check out the WISE Money Management calendar. This calendar includes a list of documents to keep on hand for tax filing, as well as a recordkeeping log. Find this and other financial resources under the Finance and Career section of the Alabama Extension website, aces.edu.
