Need a Tax Extension? Last-Minute Tax Solutions
Tax day is almost here, with the tax deadline being April 17, but if you’re not ready or don’t have the money to file with the IRS yet, you can try to get an extension; Bob Jennings, CPA, EA, on how to go about it
Procrastinators of America – it’s your time! Once again, tax day is upon us and many of us have not filed our tax return. Maybe we haven’t gotten around to it, or we have what we believe is a good excuse, or we are waiting on information or maybe, just maybe, we plain don’t have the money to pay what we expect to owe on the tax return this year. What can we do?
First, maybe you aren’t really late. Because April 15 falls on a Saturday, the tax deadline this year is not until midnight Monday, April 17. Set aside the weekend and get those returns done! No more excuses.
Related: Self-Employed and Doing Your Own Taxes? How to Do it Right
But what if we just can’t get them done for whatever reason? Here is what you do. Go to www.irs.gov and type “4868″ in the search bar in the upper right corner, then click on “2011 Form 4868.” This will take you to a fill-in form to extend the filing due date of your return for six months until October 15. Remember, if you expect to owe you are still expected to pay any balance due when you file this extension. If you have no clue as to whether you will owe or not and just haven’t gotten around to it yet, file the extension anyway. Late filing penalties total 5 percent per month apply if you don’t! Although it is an expensive choice, if you just don’t have the money to pay, file or extend anyway – you will avoid the late filing penalties but will still be subject to a late payment penalty of .5 percent per month.
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How do you make a payment with the extension? You can always write a check, or pay via credit card with a fee is one option. If you are using the IRS free file program or a paid preparer, you also have the option of electronic funds withdrawal. The IRS also has an EFTPS program available to transfer money directly from your checking account. This program requires enrollment to use.
Don’t forget your state return. Most states accept the IRS extension, but check to make sure and remember to pay any balance due.
Related: Secrets from the Tax Back Room — Tips for the Self-Employed
This year, the IRS also has a new late payment program for certain folks. If you were unemployed for at least 30 consecutive days in
2011 or 2012, you get an extra six months to pay the tax due. Self-employed taxpayers whose income in 2011 was at least 25 percent lower than 2010 also get this same deal, but both groups must have less than $200,000 income (joint) or $100,000 (single). File Form 1127-A by April 17 for this deal by going to www.irs.gov/pub/irs-pdf/f1127a.pdf . You will be charged interest, but no late-payment penalty.
Bob Jennings
If you can file your return but just don’t have the money and don’t meet the exceptions, there is one other deal available this year. If you owe less than $50,000 and have not been late or in trouble with the IRS in the past, you can get a six year installment payment program automatically from the IRS. This online payment agreement requires you to allow the IRS to debit your bank account every month. Get in this program by going to https://sa2.www4.irs.gov/irfof/lang/en/eiaTPstatus.jsp.
Related: The Perfect Pair – Benefits of Having a CPA and a Financial Advisor
Finally-don’t let this happen again. As a CPA who has prepared tens of thousands of returns over 30 years, I have heard every excuse, and very few stand up. We have had filers who are in nasty divorces, family emergencies, major diseases, impending death, natural disasters, business failures and more file on time, so you can, too!
Bob Jennings CPA, EA, CFP is President of Jennings Seminars, a national continuing education company for tax professionals, and operates his tax practice at www.thecloudcpa.com . He can be reached at taxspeaker@gmail.com
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Although Taxes may be inevitable, they have definitely become more flexible than they have been in the past. If you need an extension of time to file your tax return, you can do that by filing an IRS Form 4868. This extends your deadline by 6 months, so that you can have more time to get your tax return done right. This option has become more and more popular over time. There are several ways to file this. It can even be done from your own home.
http://www.ExpressExtension.com is an authorized E-File provider and if you still need to file a Form 4868 or a correction, it is not too late for you.