What Everyone Should Know About Applying For A Tax Extension
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
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