OR :

Tip 1: Relax. This form is one of the easiest tax forms on the planet.

Tip 2: Go to the IRS website to print out a copy of Form 4868. Or you can use your tax preparation software program to fill it out. Either way, have a copy of the form in front of you as you read the rest of this article.

Tip 3: Do you know your full name, address and social security number? That’s all there is to Part I. Put your name and address on Line 1, your social security number on Line 2, and your spouse’s social security number on Line 3 (if you are married and are filing jointly). On to Part II. (There are only two parts to this form. I told you this would be easy.)

Tip 4: For Part II, you must provide the following four numbers:

Line 4 – An estimate of your 2008 tax liability. For some folks, this is the only challenging part of the form. You may have to do some number crunching here to come up with a reasonably accurate amount. But remember this is only an estimate, and by definition an estimate need not be exact. If you are pressed for time, do the best you can and keep moving.

Line 5 – Total tax payments you made for 2008. The three most common sources of federal tax payments include: Form W-2 withholdings (go to your W-2 Box 2 to find that);  Form 1099-R withholdings (if you received any retirement plan, pension plan or IRA distributions, you should have been sent a 1099-R by now. Check in Box 4 to see if any federal income tax was withheld); quarterly estimated tax payments made via Form 1040-ES (self-employed folks often make these payments, so look in your checkbook register to see if you made these payments; they were due on April 15, June 15, September 15 and January 15).

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

Line 6 – Balance due. Calculate this by subtracting Line 5 from Line 4. If Line 5 (your payments) is greater than Line 4 (your tax liability), you don’t have a balance due. Yeah! But if Line 5 is less than Line 4, you have a balance due and if at all possible, you should send a payment for that amount to the IRS with Form 4868.

Line 7 – Amount you are paying. If you have a balance due, pay as much of it as possible now. Ideally, you want to make the entire payment. Otherwise, you’ll eventually receive a bill from the IRS for late payment penalties and interest (assuming your tax return reports a similar tax liability to the Line 4 amount).

Tip 5: Be sure to send the form and, if applicable, the accompanying payment, to the IRS on or before April 15. Make your check payable to the U.S. Treasury and check the form instructions for the correct IRS mailing address. You can also pay by credit card or electronic funds withdrawal; check the form instructions for guidance on that. If you are using a tax preparation software program, you may be able to e-file the form.

Author: Wayne Davies

Looking for more 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

Tax Reduction Toolkit. How Any Small Business Owner Or Self-Employed Person Can Save Thousands In Taxes.

Technorati Tags: federal tax extension form, taxes extension

The tax levied on an individual’s or corporation’s income is known as income tax, which is a direct tax. Individuals are taxed on their total income, taking into account the standard deductions. Corporations or businesses are taxed on their net income, which is the difference between gross receipts and expenditure. Companies would have to pay corporate or corporation tax. Tax is charged on wages, business income and capital gains.

Tax Reduction Toolkit. How Any Small Business Owner Or Self-Employed Person Can Save Thousands In Taxes.

Anyone who works in the United States has to file income tax returns and pay federal income tax every year by the 15th of April. If you cannot do so then you can  apply for an extension from the IRS  by filing Form 4868. You must then file within four months, by August 15th.

The two major types of tax systems are flat rate taxes and progressive taxes. Flat tax rate is when all earnings are charged at the same rate. Progressive taxes are calculated differentially, based on how much has been earned. For example every $10,000 will be charged higher in the beginning and the following ones would be charged at progressively lower rates. Deductions help individuals and companies pay a lower amount in taxes.

U.S. residents have to file Form 1040. Nonresident Americans will have to file Form 1040 NR. If you are exempt from taxes, you then file Form 8843. The most essential documents you need are your visa, passport, and social security number or TIN (Tax Identification Number).

As an employee of a firm you will file the W-2 form, while the self-employed will need to file Form 1099. If you generate income from investments, dividends, royalties or rental income you will also need to file the 1099 form.

If you have paid interest on mortgage or real estate taxes, you will be mailed a 1098 along with this information. These forms come in triplicate, so send the original to the IRS, and keep the copies carefully.

Profitable Property Tax Appeal Service. A Service That Every Homeowner Desperately Needs: Property Tax Assessment Review Services. 

The IRS e-file program makes it easy to file your taxes online. Before you do so, get a PIN number. For this you will need to give your birth date, social security number, and information from your previous year’s tax return.

A single person would file an individual tax return. Those who are married can file jointly or as individuals. There are many rules for separated, divorced or couples living together. Do go through them carefully. Also look closely at the rules for dependents. Do keep in mind that the social security number of the dependent has to be put on the return, and child support payments are not deductible.

After filing, if you owe taxes, pay before the deadline, or you will face penalties. You may also be owed a refund if you have overpaid your taxes. These could be paid directly or by check. Make sure to include bank account information when you are filing the form.

With your income tax returns, you can claim standard deductions or itemized deductions. These are for mortgage, student loans, some specific expensive medical treatments, charities and business expenses. The originals of 1099 forms and documentation of these deductions must be sent to the IRS.

You can file the returns yourself or get a consultant to help you. The IRS also helps filing of your returns. Call the IRS customer service representatives toll-free at 1-800-829-1040.

The IRS website (www.irs.gov) gives you extensive information. You could also go to websites like About Taxes (www.abouttaxes.org), Complete Tax (www.completetax.com), World Wide Web Tax (www.wwwebtax.com).

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

Author: Kristy Annely

Tax Returns provides detailed information on Tax Returns, Income Tax Returns, Tax Return Filing Preparations, Federal Tax Returns and more. Tax Returns is affiliated with Free Tax Filing.

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

Technorati Tags: estimate income tax return, federal income tax return, income tax return

If for any reason you are unable to complete your federal tax return by April 15th,  you can apply for an extension . There are some catches, of course (it is the IRS, after all). The extension gives you extra time to file the paperwork, but you still have to pay any money that you expect to owe and send your check along with the extension request, which is Form 4868. And it all has to arrive to the IRS address for your state or region on time.

There are really a few different ways (let’s say three) for taking advantage of this extension. Read about them here, and investigate the matter for yourself, before deciding on the best option for your particular situation. If you have an involved or problematic return, you just might require more help than one of the regular services can provide. Consider consulting a CPA or tax specialist, and don’t wait until the last minute to do so.

Online and offline
The first way is by using one of the filing services, such as TurboTax or H&R Block. They have online and offline tools for figuring your tax, so that you can then apply for the extension. They will also advise you (although you can find the same information elsewhere) as to how to pay by check or credit card, and tell you about the various state extension requests, should you need one.

You can also visit, call or log on over the Internet to take advantage of the extension through what is called a ’service provider.’ The Official Payments Corporation is perhaps the best known of these providers, all of which will charge a ‘convenience fee’ that is a percentage of the tax payment you are making. Choose the service provider that suits you best, adhere to all of their instructions, pay any amount owing before April 15th and file your return by October 15th.

Go it alone
You can also just print the form out, fill it in by hand, write a check and mail it all in yourself. When you get IRS Form 4868, Application for Automatic Extension of Time to File (downloadable from the IRS, or available at banks and post offices), you should read it in its entirety and refer to online or offline information for how to complete it. When you know what to do, you will then fill out the form and mail it off to the IRS address given for your state.

If you are going to owe money on your federal taxes, you must include the payment with the form and have it postmarked by April 15th. If you do not include a payment and you do have taxes due, you will most likely have to pay penalties and interest, despite having filed for an extension. After this first step in April, you will have six months to complete and file your return, making sure it is postmarked on or by October 15th.

Be careful and attentive
Naturally, if the IRS considers your estimated tax liability to be unrealistic, or ‘unreasonable,’ they can simply disallow any extension and begin assessing penalties and adding interest to what will now be a ‘late filing.’ And if you happen to underestimate your taxes, willfully or carelessly, you’ll end up paying interest on the amount you did not remit by April 15th.

The IRS has established something of a ’sliding scale’ for smaller errors. If, for instance, you pay under 90 percent of the tax owing, you will be charged a penalty of of a percent of that underpaid sum for each and every month the balance remains unpaid. So if you send $600 on April 15th but your completed return shows you actually owe $1,000, you will be assessed percent per month on that underpaid $400 that is now considered past-due. This comes to about $2 a month, and will be accrued until the balance is marked ‘paid in full.’

Other considerations
If you are filing U.S. taxes but live outside the United States, you need a different form for requesting an extension, which is IRS Form 2350, Application for Extension of Time To File U.S. Income Tax Return.  If you think you may need special tax treatment or are unsure about your tax liability, you should refer to IRS Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad. After reading this publication, you may need to direct further, more involved questions to the IRS directly, or to your tax advisor.

Also, you should make note of the fact that state tax extension guidelines and procedures vary. For up to date, detailed information concerning state extensions, filing deadlines, interest and penalties, and mailing addresses, consult your state tax agency or head online to a tax expert’s site and do some research. The one thing you can count on is that government, at every level, will do its best to make clear what your tax responsibilities are, as the income tax is an important source of revenue.

By: Jeff Parrack1

Article Directory: http://www.articledashboard.com

1040-Tax Extension will file your online tax extension with the IRS and guarantee that the IRS will accept your application. Visit us online for automatic extension on your individual tax return.

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

Technorati Tags: federal income tax form, Federal Tax Extension, IRS Extension

Longer effort rendered for filing but a better reason not to make mistakes or blunder. However, you may have to be careful of your intention or your current socio-economic status as these may cause cancellation of your extension. Here are some tips to ensure a smooth income tax extension.

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

Make sure that when you file for an extension, that your estimate for initial assessment is reasonable and well explained. The local tax agency such as the IRS is keen and always suspicious of intentions of income tax extension requests for possible manipulation or exploitation of intended tax returns throughout the given 6-month grace period.

Bear in mind that the income tax exemption only pushes back the due date of your paperwork. It doesn’t have any provisions for any exemptions, refunds, or alterations on the due tax estimate incurred over the course of the 6-month period. It is similar to a put off paperwork due, more specifically until October15 2009. Make sure that you also furnish the most accurate and honest declarations since you have the extended time to make it.

The filing of federal tax returns for 2008 is due on April 15, 2009. Make sure that you file for an extension a little early than that date to avoid technicalities and cancellation of your request for an income tax extension. . Make sure that you also use the correct form. Normally, IRS form 4868 is the default form used for extensions for individuals, and IRS forms 7004 and 1138 for corporations. There are also other variants for other exemptions such as being outside the U.S. when filing for an income tax return or the like. Properly timed filing and using a proper document is the most important and initial step for a smooth extension grant.

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

Author: Tim Whiteman 

Maximize your tax refund this year with the "Tax Tips Newsletter". Find out which tax filing software is easiest on your wallet.

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

Technorati Tags: federal income tax, IRS Extension, tax extension

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

Tax debt is an ever-growing problem in the United States. It is foolish not to take action when it comes to paying taxes. Failure to explore options leads to the problem becoming increasingly worse. For example, you could be levied and that means your bank account, wages, or personal property can be seized or partially seized. Even if you think you can not afford to pay the IRS, if you work with a professional who can review alternatives for repayment, you will get to the bottom of your tax debt and get it resolved. Here are some  alternatives to paying back taxes :

Make A Payment In Full – This is not the easiest thing to do but here are some ways it can be accomplished:

Home equity loans help by shifting your back taxes into your mortgage payment with a lower monthly percentage.

Borrowing money from friends and family. Obviously, do so with the assumed intention of paying them back.

Sell old valuables on Internet sites, such as Ebay. Many people will buy your merchandise if it is in good condition.

Pay using a credit card. Although this may help you initially, do not carry this balance for too long. This balance also accrues interest. Credit card interest is also higher than interest you would accrue on an IRS payment plan.

IRS Payment Plan :
In less than 3 years, with monthly payments, you can pay back taxes. This option requires discipline but monthly payments will get you into compliance with IRS. With this option, you can contact the IRS directory or its easier for a small fee to work with a tax consultant who will represent you.

Offer In Compromise (OIC):

Give evidence or proof that you have no available means of repayment. This will help to show the IRS that you have exhausted other alternatives and can help to reduce your existing debt. An Offer In Compromise is rarely excepted by the IRS. If you are going to pursue this option, then it is best to work with a tax settlement firm because otherwise your OIC will be most likely rejected.

File For A Tax Extension:
Filing a request for an extension can give you time to make the necessary income to pay back State or IRS taxes. You can easily do this for a small fee (around $60) by filing an extension online. Many websites offer this service. It will usually give you 45 days before interest starts accruing so this option is only good if you feel in the next 45 days you will get the money to pay.

If there is a will, there is a way. Talk with an experience IRS professional to explore other means of repaying tax debt. Not filing is worst than admitting to the IRS that you can not afford to pay your taxes. A tax professional will be willing to work with you. They want to save you money, time, and headache. They will work with you diligently in order to do so.

Paying Back Taxes
If you need help paying back taxes visit our site (link) above or call 1-800-717-2797 for a free consultation with no hidden fees or obligation.

By Manuel Davis Jr Published: 1/17/2009

Energy Savers: Tax Credits

As April 15th draws nearer, no doubt taxes are on your mind. You may be wondering whether the recently passed American Recovery and Reinvestment Act (aka the "Recovery Act") will affect your taxes for 2008. 

Va. tax collections remain weak through February

Personal income taxes, which account for about two-thirds of all general tax collections, were flat – a 1 percent increase over February 2008 – compared to January’s 16-point dive that rattled lawmakers and the Kaine administration. 

Lil Kim Owes Nearly $1 Million In Back Taxes

The tax debt was racked up from IRS liens and non-payment over the years, dating back from February 2004 all the way up to April of 2008. The paper published these records of what’s owed: – The state of New York filed a $12599 tax [...]

IRS seeks $227 million in back taxes from Stanford

The US Internal Revenue Service has asked a judge to let it to continue to seek unpaid back taxes from Allen Stanford, the billionaire Texan accused of an $8 billion fraud…

Technorati Tags: filing back taxes, irs back taxes, irs offer in compromise, irs payment plan

This may be pretty confusing to the average taxpayer. Why would you bother with a tax extension if you still have to pay on time? (Which is to say, March 15 for business taxes and April 15 for personal income taxes).

Save 20% on personal income tax extensions online with FileLater thru March 31 with coupon code personal20PC.

Because you still might save money. Tax extensions give you extra time to prepare the most accurate and advantageous return possible–but the Feds still need the money you owe. If it turns out that you’re due some money back, you’ll get a refund. If you discover that you owe even more, you’ll have to pay it. But whatever your tax liability is on March or April 15, you have to pay it at that time.

What Happens if I Don’t?
If you don’t pay your income taxes by the standard deadline (March or April 15), you’ll have to pay a penalty that accrues each month your taxes stay unpaid. If you don’t pay by the time your extension is due (Sept. 15 for businesses and Oct. 15 for individuals) you’ll start accumulating interest fees as well.

The late payment penalty is typically 0.5% of your tax liability, calculated each month. For example, if you have $1,000 of unpaid taxes, you will accrue $5 every month, starting in March/April, until you pay.

Now, if you filed for a tax extension and you haven’t paid by that deadline, you will begin to accrue interest on your unpaid taxes. This interest is usually 5% of your outstanding balance per month. If your taxes are paid more than 60 days late, you’ll pay a minimum of $100 in interest.

Example: Let’s say you  file a personal income tax extension, but it’s Nov. 15 and you still haven’t paid the $1,000 you owe in taxes. This means you now owe $1,030, which is your balance plus six months’ worth of late fees at $5/month. In addition, you’ll owe an additional 5% in interest, which is about $51 for November. So as of November 15, you’ll owe $1,081 instead of the original $1,000.

The lesson here is: File an extension, but pay your taxes on time!

Save 20% on personal income tax extensions online with FileLater thru March 31 with coupon code personal20PC.

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

Author: Chaney Rankin

Chaney Rankin writes for FileLater.com, an online tax extension service

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

Technorati Tags: file for income tax extension, income tax extensions, tax extension, why must we pay taxes

You might be surprised to learn that filing a tax extension does NOT mean that you have an extra five or six months to actually pay your taxes.

This may be pretty confusing to the average taxpayer. Why would you bother with a tax extension if you still have to pay on time? (Which is to say, March 15 for business taxes and April 15 for personal income taxes).

Because you still might save money. Tax extensions give you extra time to prepare the most accurate and advantageous return possible–but the Feds still need the money you owe. If it turns out that you’re due some money back, you’ll get a refund. If you discover that you owe even more, you’ll have to pay it. But whatever your tax liability is on March or April 15, you have to pay it at that time.

What Happens if I Don’t?
If you don’t pay your income taxes by the standard deadline (March or April 15), you’ll have to pay a penalty that accrues each month your taxes stay unpaid. If you don’t pay by the time your extension is due (Sept. 15 for businesses and Oct. 15 for individuals) you’ll start accumulating interest fees as well.

The late payment penalty is typically 0.5% of your tax liability, calculated each month. For example, if you have $1,000 of unpaid taxes, you will accrue $5 every month, starting in March/April, until you pay.

Now, if you filed for a tax extension and you haven’t paid by that deadline, you will begin to accrue interest on your unpaid taxes. This interest is usually 5% of your outstanding balance per month. If your taxes are paid more than 60 days late, you’ll pay a minimum of $100 in interest.

Example: Let’s say you file a personal income tax extension, but it’s Nov. 15 and you still haven’t paid the $1,000 you owe in taxes. This means you now owe $1,030, which is your balance plus six months’ worth of late fees at $5/month. In addition, you’ll owe an additional 5% in interest, which is about $51 for November. So as of November 15, you’ll owe $1,081 instead of the original $1,000.

The lesson here is: File an extension, but pay your taxes on time!

Chaney Rankin writes for FileLater.com, an online  IRS Extension Request  service.

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

what if?

My accountant, when I can afford one, tells me to pay, not dodge, what I owe. And, oh, Mr. President I am so tired of all those taxes, so tired, but I am so lawful as well. 

Jail Time for Tax Evaders?

I suspect that if those penalties were high enough, and enforced it would act as a much better deterrent since it changes the risk/reward balance for people who want to avoid paying their [...]

State income tax filings are up 10% …

Taxpayers who owe tend to put off paying their tax bills until closer to the deadline. The Internal Revenue Service reports that the number of federal income tax returns [...]

Technorati Tags: file tax extension, I owe taxes, online tax extension

Most of the time CPA’s and tax companies are completely slammed and don’t have time to take detailed looks at their clients statements. When you file for an extension you will be able to meet with a tax professional in a much more relaxed setting. If you don’t need a tax professional, it can allow you more time to get your tax documents in order under your own time.

To file for an extension with the IRS you will need to file IRS form 4868, which is the automatic extension form. If you owe taxes, you will also need to get a good estimate of what you owe. The IRS will still tack on interest for unpaid taxes if they are not paid by the 15th. Even if you owe taxes and cannot pay, one good thing to know is that the failure to pay penalty is only .5% per month, while the failure to file penalty is up to 5% of the amount owed per month. Filing for an extension will also allow you to get around that unfiled penalty until October 15th.

If you decide to extend your tax filing deadline, you must have your tax filing documents post marked and sent by April 15th. To ensure minimal interest charges tacked onto your tax amount, ensure you enclose a check for your best estimate of your taxes owed. You can also pay online through a credit card by using pay1040.com and officialpayments.com, for a fee of course.

For this year’s tax filing, it has become easier than ever to file for an extension. There are even companies out there that streamline this process for individuals and businesses for a small fee. Take advantage of what is offered by the IRS to save you stress and buy you more time.

To find more information on using a Filing a Tax Extension please  visit our site for more information. Find discounts for services that do express extensions in 5 minutes of your time.

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

Tax deduction 2009

Actually i was not able to directly find a reference about extension of child tax credit on IRS website. However the following URL mentions that the child credit or dependent credit has been extended to 2009.

File Income Tax Extension

If you can’t complete your federal tax return by the April 15 deadline, find out how and when to file for an extension with these tips from TurboTax.  

EasyTaxReturns.com 2008 Taxes

If you’re looking for an online electronic tax return filing option, take a look at EasyTaxReturns.com as they have several very good programs which include free eFiling with your return.

The Basics of Smart Tax Management

IRAs are part of good tax management too. Contributions to a traditional IRA are tax-deductible, and account earnings aren’t taxed until you withdraw that money at age 59.5. There are income restrictions, though, and if you’re an active participant … Filing your tax return by April 15 (or August 15 if you file an extension) is important. The drawbacks of not filing include:. Forfeiting the opportunity to pay in installments. 

Progressive News and Commentary with an Attitude …

E-file your tax extension online to IRS and enjoy the benefits of tax extension online. File online tax extension now get more time to file your taxes get IRS confirmation soon and get peace of mind. 

Technorati Tags: Federal Tax Extension, income tax extension, tax deadline

Introduction

As the tax filing deadline is quickly approaching, many procrastinators and those who legitimately are just not ready to file their returns become stressed out and frantic, trying to meet what may virtually be an impossible deadline. Many would rather rush to get their returns prepared than file an extension. Common concerns include, but are not limited to, being flagged as a late filer, being assessed penalties, or being more likely to be audited. If you are one of these individuals, I hope that I can put your mind at ease and inform you of what it really means to extend your tax return and the benefits of doing so.

A few notes before getting started: This article is written assuming a tax year that is the same as the calendar year, which is the case for most individual taxpayers. If a tax deadline noted falls on a holiday or weekend, the deadline is actually the next business day. The focus of this article is on the filing of federal individual extensions except where noted otherwise. ‘Tax professional’ as opposed to ‘tax preparer’ is referred to in this article. My definition of ‘tax professional’ is someone who has extensive knowledge, education, and experience in taxation and can provide tax consultation and planning services in addition to preparing returns. Two commonly recognized credentials held by tax professionals include CPA (Certified Public Accountant) and EA (Enrolled Agent). CPAs and EAs are by no means the only tax professionals out there and not all CPAs do tax-related work.

With those preliminary notes out of the way, I will now discuss what you should know about extensions.

What is an extension?

First and foremost, it is important to know that an extension is an extension of time to file an income tax return, not an extension of time to pay the tax due. Unfortunately, many taxpayers miss the part about it not being an extension of time to pay, perhaps due to wishful thinking.

There are two federal  individual income tax extensions  that can be filed. The first extension, which is ‘automatic,’ is due by the April 15th tax deadline and is a four month extension of time to file. Thus, if you file this first ‘automatic’ extension, you will have until August 15th to file your income tax return. Your best estimate of the tax that will be due with the actual return is still due by April 15th.

As for the first extension being ‘automatic,’ that does not mean it just happens – you need to actually file the extension. There are various ways to do so which are convenient and are discussed later. The reason it is referred to as ‘automatic’ is that you do not need to provide an explanation for why you need additional time to file.

The second extension is not ‘automatic’ like the first one. If you cannot complete your returns by the August 15th first extension deadline, you can ‘apply’ for an additional two months. The second extension is considered an ‘application’ because you need to provide a good reason why you need the additional two months to file. You need to demonstrate that you made a reasonable effort to get your returns completed within the first four month extension period or that you had extenuating circumstances. If the reason is merely for your convenience, your request can be denied. If your application is denied, your return will be due immediately or within a 10-day grace period. If you did not timely file a first extension, a second extension will only be approved in cases of undue hardship.

Between the two extensions, that gives you up to  six months additional time to file  beyond the April 15th tax filing deadline. Six months is generally the maximum total time a return can be extended by law.

Why should I extend?

The Internal Revenue Service prefers that you file a complete and accurate return. A return you have to rush through, do not have all information for, or make estimates of figures for is unlikely to be complete and accurate. Thus, it is better to  file an extension  if you are approaching April 15th and you do not have all information needed or otherwise cannot file complete and accurate returns.

If you use a tax professional and you are getting your tax information to him or her just a few weeks or so before April 15th, do not be surprised if he or she indicates an extension will need to be filed. You are more likely to have a complete and accurate return if your tax professional is not trying to rush to make the April 15th deadline.

A few more comments for those of you who use tax professionals. If it is approaching the tax deadline and you have not yet contacted your tax professional, do not be surprised if he or she is unable to speak with you when you call his or her office. Also, do not assume that just because you used his or her services last year they will file an extension for you without you specifically requesting it. Tax professionals are very busy dealing with many clients and working long hours all of tax season and they get even busier as April 15th approaches. Moving forward, you should consider getting in contact with your tax professional’s office well in advance of the tax deadline to determine what he or she needs to file an extension, if necessary, and prepare your taxes.

In addition to having a complete and accurate return, there are certain planning opportunities that can be taken advantage of if you or your tax professional is not forced to rush through your return. One example is funding certain retirement plans such as SEPs and Keogh Plans – these can be funded for the prior year through the extended deadline of the return that falls in the current year. Some plans, such as a SEP, can actually be established for the prior year up through the extended due date of the tax return. It is important to note that traditional and Roth IRAs need to be funded by April 15th to qualify as contributions for the prior year. For more information on such planning opportunities for the year just past as well as the current and future years, you should consult with your tax professional.

What are the common concerns over extending?

As referenced earlier, many individuals are adverse to even the idea of extending due to concerns such as being ‘flagged’ as a late filer, being assessed penalties, or being more likely to be audited. Filing an extension in and of itself is not going to raise any ‘red flags’ or cause problems as long as your extension is timely filed and the tax due is paid by April 15th. As for being audited, you are more likely to be audited if your return is incomplete, includes estimated figures, or is inaccurate.

Another concern individuals have is that it will cost them more to file an extension. The IRS does not charge for  filing an extension with the IRS . Your tax professional may charge you for doing so, but the fees charged most likely will be far outweighed by the benefits of the return being complete and accurate. Incomplete and/or inaccurate returns can result in you being contacted by the IRS and generally require that an amended return be filed. Your tax professional will likely charge you for preparing an amended return. If additional tax is due, penalties and interest may be assessed. A complete and accurate return is much less likely to result in any correspondence from the IRS. Additionally, it includes an accurate tax liability, which means lower taxes or reduced penalties and interest as related to an understated tax liability. Like with many things in life, it is better to do something right the first time as there is more time, effort, and expense associated with having !

to correct something later.

Yet another reason that some individuals do not want to extend is because they are in the process of buying a new home or refinancing and their lender is requesting a copy of their tax return. Many lenders will accept a copy of an extension along with copies of documents substantiating income (W-2s, 1099s, K-1s, etc.) and copies of the prior year tax returns.

What information is needed to file an extension?

You will need your general taxpayer information, which includes your name, name of your spouse if married and filing a joint extension, your social security number, your spouse’s social security number (if applicable), and your complete address. To avoid potential delays in the processing of your extension, special attention is required if any of the following apply: your name has changed due to marriage, divorce, etc.; your address has changed since you last filed a tax return; or you want to have correspondence related to your extension sent to your tax professional or otherwise. You should refer to the instructions for the extension form to properly address any of these items.

There is not much other information needed. The items needed for the tax year that the extension is for are an estimate of your total tax liability and the total tax paid. The estimate of the total tax liability is the more difficult of the two. You need to come up with your best estimate of what the tax liability is. The IRS instructions for the completion of Form 4868, ‘Application for Automatic Extension of Time to File U.S. Individual Income Tax Return’ clearly state: ‘Make your estimate as accurate as you can with the information you have. If we later find that the estimate was not reasonable, the extension will be null and void.’ If that were to be the case, your return would be considered late. A late filed return is subject to late filing and late payment penalties and interest.

How do I file an extension and, if applicable, pay the (estimated) tax due?

Either you or your tax professional can prepare and file your extension. The methods for filing it include e-file by phone, e-file by computer, or filing a completed paper Form 4868. Regardless of who is going to prepare and file your extension, the information discussed in the previous section will be needed. Thus, if you use a tax professional, you need to get in touch with him or her in advance of the tax deadline to ensure that he or she has that information.

E-file by phone is a very convenient option if you are going to file your own extension. The Form 4868 and its instructions can be easily downloaded from www.irs.gov. After reviewing the instructions for the form, use Form 4868 as a worksheet and then call the toll free number in the instructions. You will be prompted for the information from the completed form and given a confirmation number at the conclusion of the call. In order to e-file by phone, you must have filed a federal return for the prior tax year.

As for paying the (estimated) amount due, you can do so via electronic funds withdrawal (EFT, from a checking or savings account), credit card, or check. The EFT option can be used if you e-file by phone or e-file by computer. You will need to enter additional information when filing the extension to include AGI (Adjusted Gross Income) from your prior year tax return and the routing and account numbers for your bank account. Payment by credit card can be done via one of several service providers, each of which charge a convenience fee based on the amount of the tax payment being made. Payment by check can be made if you e-file by phone, e-file by computer, or file a paper extension form. More detail about these payment options is included in the instructions for Form 4868.

It should be noted that if you are a taxpayer that makes or should be making estimated tax payments, you should compute and timely make those payments for the current year even if you filed an extension. The federal income tax system is a ‘pay as you go’ system and if you are self-employed or otherwise have income that results in a tax liability that is not paid via withholding, you may be required to make estimated tax payments throughout the year. If you are not sure if this applies to you, it is recommended that you research this topic or consult with a tax professional.

For further information about filing a second extension, please refer to the instructions for Form 2688, ‘Application for Additional Extension of Time to File U.S. Individual Income Tax Return’ which can be easily downloaded from the IRS website as www.irs.gov.

What about state, local, and other income tax returns?

Some states will accept the federal extension while others require that you file an extension document with them. Ohio accepts the federal extension and does not require that you send them a copy of it, though you do need to send in the tax due, if applicable, by the April 15th deadline. If you live in a state with municipal or other local income taxes, you may need to file an extension with the locality (or localities) that you have a filing responsibility with. Further discussion about state and municipal filing requirements are beyond the scope of this article as they vary from state to state. Check with the respective department(s) of taxation or your tax professional for more detail. Like with the federal extension, you generally need to pay any state or local tax due at the time the extension is filed.

In Conclusion

Whether you prepare your own taxes or work with a tax professional, I hope that you have a better understanding of what an extension is, when it should be considered, and what is involved in completing and filing one. If it is close to the April 15th filing deadline and you have not finished or even started preparing your returns, you should consider  filing an extension with the irs . This will allow additional time to ensure that the returns are complete and accurate and, in turn, should reduce the stress associated with filing your taxes.

About The Author

This article may be re-published only in its entirety and the author must be given acknowledgment including full email link.

By Tiffany J. Morisue, CPA, 04/03/05
e-mail: tiffany@rrohio.com

Morisue & Associates, LLC
dba ABC Solutions
3964 Brown Park Drive, Suite A
Hilliard, Ohio 43026-1163
Ph. (614) 850-9440
Fax (614) 850-8770
www.abcsolutionsohio.com

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