How to File a Tax Extension

March 31, 2012 by  Filed under: Taxes 

We all have those months: everything seems to go wrong, deadlines sneak up out of nowhere, and you fall behind.

Unfortunately if things start to go south over the next month or so, your taxes are going to be affected. This year we all get an extra two days to file -until April 17, 2012! – but that may not be enough extra time to get everything in order.

Don’t worry. The April tax deadline is not the end of the world. If you can’t get your return in to the IRS by then, you can request an extension. All you have to do is file Form 4868 [Application for Automatic Extension of Time to File U.S. Individual Income Tax Return].

An extension gives you an extra six months – until October 15, 2012 – to file your return without accruing any of the penalties or interest that normally accompany taxes filed after the deadline.

An extension can be great, but there’s a catch: even though you have until October to file your actual return, you still have to pay the taxes you owe by the regular April 17 deadline.

This may sound counterintuitive, but on Form 4868, which you have to file in order to request an extension, also requires you to estimate your tax liability. If that happens to be a refund, great, you can file for an extension without paying anything. But, on the other hand, if it turns out that you owe tax, you have to pay the IRS when you file for an extension.

If you don’t pay, they may well grant your request for an extension, giving you a six month reprieve on failure-to-file penalties. But your unpaid tax liability will begin accruing failure-to-pay penalties and interest on April 18. So it’s best to go ahead and pay your estimated tax liability when you file for an extension.

When you do finally end up filing your return – sometime before October 15 – the IRS will make up the difference between your actual tax liability and what you paid as your estimated tax liability. If you didn’t pay enough originally, you will have to make an additional payment to the IRS. But if you paid too much you can look forward to a refund.

U.S. citizens or residents who are “out of the country” should know that they automatically get an extra two months to file and pay their taxes – even without requesting an extension. But then if they do need an extension, it will only grant an additional four months, not the usual six.

Curran Boomer is a tax enthusiast who has helped many taxpayers file a tax extension.

Article Source:
http://EzineArticles.com/?expert=Curran_M_Boomer

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