For all you procrastinators out there, here’s a nuts ‘n bolts guide on how to legally postpone the filing of your 2008 income tax returns. When it comes to putting things off, you can never plan too far ahead.

In many cases the IRS allows you to  file a no-questions-asked extension form . Which particular form you file depends on what type of entity your business happens to be.

Save 20% on business income tax extensions online with FileLater thru March 31 with coupon code business20PC.

SOLE PROPRIETORSHIP:
You need to file Form 4868 to get an automatic 6-month extension to file your personal income tax return.

CORPORATIONS:
Whether you are a "C" Corporation or an "S" Corporation, you must file Form 7004 by March 15. Doing so grants you an automatic 6-month extension for filing Form 1120 ("C" Corp) or Form 1120S ("S" Corp).

PARTNERSHIPS:
You need to file Form 7004 by April 15. This obtains a 5-month extension to file Form 1065.

LIMITED LIABILITY COMPANIES (LLC):
LLC’s can be taxed like a sole proprietorship, a corporation, or a partnership. So simply file the extension form for whichever entity you are being taxed like.

Now, before you start extending to your heart’s content, please keep the following guidelines in mind.

 Ultimate Tax Reduction Guide. How To Slash Your Taxes Quickly, Easily And Legally.

EXTENSION TIP #1:

Never forget the mantra of all tax extension forms: The extension to file the return is NOT an extension to pay any tax due. It’s only an extension for the filing of your tax return.

In other words, do not view the extension as an opportunity to legally postpone the payment of your tax.

So if you have a balance due on the return, then you must still pay the tax by the original tax return due date. If you file the extension but do not pay the balance due on time, then you will pay penalty and interest for late payment of tax. You will legally avoid the penalty for late filing, however.

So what’s the point in filing an extension if you still have to pay the tax?

Three possible scenarios — first, some folks get most of their tax data organized and are able to get enough of their return done to get the big picture: "Do I owe or am I getting a refund." You do the calculations, see where you stand, and if you owe, send in the extension form with a payment that’s pretty close to the final figures.

You may have a few deductions that you need to research, one last shoebox to peruse. You need more time, that’s all.

Second, you’re running way behind on tax matters this year. Hey, it happens! There’s no way you’re going to get the return done on time, and you know you’ll probably owe, so, be sure to file the extension, even if you don’t know how much you may owe or even if you can’t make a payment with the extension. The reason? Because there are penalties for late filing and penalties for late payment of tax. By filing the extension, at least you avoid the late filing penalties.

In short, by filing the extension, you can save yourself some money in late FILING charges, but not necessarily late PAYMENT charges. Be sure to understand the difference!

The third scenario is even more common — you know you’re getting a refund; you always get a refund. Maybe you’re self-employed and your spouse has a W-2 job, and the spouse’s tax withholdings are always enough to cover both of you. And you’re in no hurry to get the refund.

Which brings me to:

EXTENSION TIP #2:

If you are getting a refund on your personal return, you have 3 years to file the return to claim the refund, without any fear of a late filing penalty.

That’s right. As long as you file your return within 3 years of the original due date (for Year 2008 returns due April 15, 2009, that would be April 15, 2012), you’ll get your refund and there is no penalty for filing late, even if you file after the extended due date of October 15.

Bottom line: if you think you may owe, if at all possible, do enough calculating to send in a payment with the extension. If you’re getting a refund, still send in the extension (just to be safe), but relax, you’ve got plenty of time to get your money back, assuming you didn’t need it yesterday.

Oh, one more thing:

EXTENSION TIP #3:

This article only deals with federal extension rules. State rules vary considerably, so be sure to check with your state’s tax department or your local tax professional to get the scoop on the extension rules for your particular state.

Some states simply piggyback off the federal rules. Others don’t. So be careful here or you could be penalized severely for assuming that your state’s rules are the same as the feds.

Author: Wayne Davies

Looking for more small business tax tips? For a free copy of the 25-page Special Report "How To Instantly Double Your Deductions" visit http://www.YouSaveOnTaxes.com. Wayne M. Davies is author of 3 ebooks on tax reduction strategies for small business owners and the self-employed

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

Five Tips to Avoid Tax Time Stress

You will owe interest on any amount not paid by the April deadline, plus a late payment penalty if you have not paid at least 90 percent of your total tax by that date. See IRS Form 4868, Application for Automatic Extension of Time to [...]

IRS Tax Debt Guide

If you prepare your taxes before April 15 and know you won’t be able to pay the tax due, you can file for an extension of time to pay. Depending on your circumstances, the extension will be anywhere from 30 to 120 days. 

IRS Tax Tips

If you filed an extension and you paid at least 90 percent of your actual tax liability by the due date, you will not be faced with a failure-to-pay penalty. 7. If both the failure-to-file penalty and the failure-to-pay penalty apply in any month, …. TAC locations, business hours and an overview of services are available at IRS.gov. Just go to the “Individuals” tab and click on the link for Contact My Local Office in the left tool bar section under IRS Resources.

Twitter Tax Tips

If you’re planning on requesting a corporate tax extension, remember it’s an extension of time to file, not time to pay. 

Technorati Tags: business tax deadline, federal income tax extension form, tax extension

Are you confident that you have the skills required to do your own income tax preparation? This article discusses the skills required to do the work yourself. So you can decide if it is worth the effort or should you get a professional to do the work for you.

There is one hassle that we all have to deal with each and every year and that is doing our income tax preparation. There are really only two choices we have in this matter. You can either do it yourself, or have someone else do it for you. There are, however, pros and cons to each method. Some people are fine with doing it themselves, while others have a tough time with it. The level of difficulty with tax preparation depends on a number of factors.

For example, if you own your own company, or if you are self employed, then you will have a very complicated tax return. You simply, may just have one job and no assets, in which case your income tax preparation could be very easy. Whether you will be able to handle the task will depend on additional factors.

Are you good at working with numbers? Can you follow written directions? If you answered yes to either of these, and preferably both, then you will have no problems doing your own income tax preparation. Those people who are just good at math can look at a problem work out a way to solve it. Tax preparation does require quite a bit of math the amount will depend on how complicated your tax situation turns out to be. If your level of math is sufficient and your affairs not very complicated then you will probably able to do it on your own. Tax preparation is not only about math. You need to be able to follow directions. To successfully fill out your taxes you need to be able to follow a variety of directions.

Perhaps you don’t have these skills. What should you do in this case? The best option is to have a professional handle your income tax preparation. Especially if you don’t trust you’re yourself when it comes to tax filing, have someone else do it for you. Because of the consequences associated with errors on a tax it may be prudent to let someone else handle the dirty work so that you don’t have to.

When it come to income tax preparation, you probably have to decide if the cost involved in having a professional do the work worth the reduction in stress for you. Generally speaking, if you expect a refund and are not to concerned about getting it right, then go ahead and do you own. If your taxes are more complicated or you get stressed about the whole situation you would be well advised to save your self the trouble and find someone else to do the work for you.

You need more information now on tax preparation and a copy of the FREE report on Reducing Personal Tax so now is the right time to head over to USTaxesGuide.com

xx

Don’t Mess With Taxes
I strongly suggest that when it comes to filing your taxes, you get additional, professional [...]

Free tax filing services for low-income families
During the phone call, the clients will speak with a staff member who will review their eligibility

How to Choose the Right Tax Accountant
With tax season almost here, many of us are dreading finding a tax accountant [...]

Technorati Tags: file my taxes, help back taxes, tax help filing