Still waiting for your 1099, W-2 or are you missing tax documentation? An extension is easy to get for your 2007 tax return. You can get an additional six months just for asking. You can get until October 15, 2008.
If you get to April 15th and your taxes are not done, you have a couple of options. You could pretend that you still have more time, hope the tax fairy takes care of it or perhaps even hope that the IRS will not notice. If you have filed taxes before, the Internal Revenue Service IRS will notice and you will most likely pay a penalty if you do not get them in on time. The short term fix is easy; file for an extension.
How Do I File An IRS Tax Return Extension?
To file an extension, you just need to get IRS Form 4868 which will allow you 6 months to get your taxes filed. This form will ask you for your social security number, name and address. It will also ask you to calculate your estimated tax liability and send any balance due. If you make the payment and cover at least 90% of your actual tax liability, you are in great shape. You will not be required to pay a late filing fee or late payment penalty. I just want to reiterate that you still owe your taxes by April 15, you just do not to have your final tax forms to the Internal Revenue Service if you use this form.
You can get the form from any IRS office or get it by calling toll free 800-Tax-Form, or Find IRS Form 4868 online. When you fill out the form, you will need to retrieve some information from your 2006 return. Again, you do not need to give the IRS any reason for why you want the extension. Being lazy or you just do not want to deal with it now will suffice as a reason, but nobody is going to ask you or cares what it is if you call the IRS. Sending in the form is the best thing you can do to protect yourself from fees and penalties if you are not going to have your taxes completed in time for the April 15th deadline.
Tax Form 4868 will give you until October 15, 2008 to finish and send your return in. I just want to make the point again that you still need to pay the tax owed by April 15, you just do not need to have your tax forms in.
What Happens If I Do Not File For My Tax Return Extension?
It can be very painful if you do not file for the extension. The IRS can levy you with a late filing penalty of 5% of the tax that has not been paid by the due date for every month or part of a month that your tax return is late. The maximum penalty is usually no more than 25%. If your return is more than 2 months late, you will be charged a minimum penalty of $100 or the balance of the tax that is due on your return. You will have to pay the smaller amount of these two payments.
The late payment fee can be removed if you can demonstrate “reasonable cause” for not having made your payment on time. You are considered to have reasonable cause if you have already paid 90% or more of your actual tax liability through estimated tax payments or through employer withholding.
You will not be able to get a second extension. So make sure that you get it done by October 15th.
I know taxes are no fun, but it is just something that needs to get done. The sooner you start getting your receipts together, the sooner it will be over. Review other ways to save on your taxes.
Debt Free Dave has been in the mortgage and consumer finance business for over 10 years. He has a Finance and Real Estate degree from the University of Arizona.
This Article is designed to be of general interest and should not be considered legal advice. The specific information discussed may not apply to you. Before acting on any matter contained herein, you should consult with your personal legal adviser.
