How To File An Extension

by MB on April 14, 2008

Times up!  Well, almost.  If you haven’t even started work on your 2007 tax return, it may be time to consider filing an extension.  The good news is that it is fairly simple and will buy you some additional time to get your act together.

The first thing you should know is that by filing an extension, you will get an additional six months to file your return.  This means that your filing deadline is moved forward from April 15, 2008 to October 15, 2008. 

Very important:  Filing an extension gives you extra time to get your tax return to the IRS, it does not give you more time to pay any amounts owed.  If you think you owe, send a check for the estimated amount with the extension.

With that little warning out of the way, lets take a quick look at the penalties you could face for not paying on-time.  You can be charged 5% per month on any amounts owed, up to a maximum of 25%.  If you do not pay taxes you owe when you file an extension, the penalty is 0.5% per month, plus interest.  As you can see, even if you don’t have the funds available to pay the taxes you owe, it is still in your best interest to file an extension.

You will file your extension using IRS Form 4868.  Here is a link to the IRS publication: Form 4868, Application for Automatic Extension of Time To File U.S. Income Tax Return

Most tax preparation software can help you complete the form, or you can fill it out by hand and mail it in (it’s short).

Disclaimer:  The author of this post is not a tax professional, and the information provided, while believed to be accurate, is for educational purposes only.  Everyone’s tax situation is different, please consult a tax professional before acting on any advice on this site.

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