Last Updated: April 17, 2022
The deadline to file your personal income taxes for the 2022 tax year is on Monday, April 18, 2022. If you are not able to file your taxes by this date, you should file a fast, free extension to get additional time to file. You need to know the following three items to successfully file for a tax extension.
1) Estimate how much tax you owe for 2022
Enter all the tax forms (W-2, 1099, etc.) you have received into a tax software of your preference. You may not receive a tax form for everything that happened in 2021 which could have an impact on your taxes. In that case, you will have to estimate the gain or loss occurring from those transactions for extension purposes. Don't worry; they don't have to be the exact amounts!
For example, you may not know how much gains you had on trading cryptocurrency during 2021 because you are still in the process of reconciling your records on CoinTracker. In this case, you can estimate a reasonable number as your profits and enter it into your tax program for extension purposes (all you are trying to do here is estimate your tax liability).
2) Subtract taxes have you already paid towards 2021
If all of your income comes from employee wages, the amount of tax you have paid towards 2021 will be on Box 2 of your W-2. If you are a self-employed individual or have a business, you might have paid quarterly taxes to the IRS throughout 2021. Enter these amounts in your tax software.
Once step 1 and 2 are complete, your tax software will show your estimated tax due amount for 2021.
3) Complete Form 4868
Part I is self-explanatory and steps 1 and 2 will help you fill out Part 2. This form can be mailed out according to the instructions on the form or electronically filed with your tax software.
You can extend your tax filing deadline to October 17, 2022, by filing an extension. If you owe taxes for the 2021 year, you have to pay this liability when you file your extension.
If you have any questions or comments about crypto taxes let us know on Twitter @CoinTracker.
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Disclaimer: This post is informational only and is not intended as tax advice. For tax advice, please consult a tax professional.