How to File a Tax Extension

Filing a tax extension is not rocket science, really. All you need to do is understand the instructions and follow them meticulously. This article clears the air on all the misgivings associated with filing a tax extension.

As April 15 draws closer, many taxpayers clamber to file their federal tax return every year. For the year 2012, the deadline to file your tax return is April 17, courtesy April 15 being a Sunday, and April 16 being Emancipation Day. If you think you will be unable to file your federal individual income tax return by this deadline, it is advisable to file for an extension. However, remember to apply for an extension before the due date of April 17, as you will not be allowed to do so after this date.

What is a Tax Extension

The term ‘tax extension’ is a source of great confusion for many. The word ‘extension’ often dupes many into believing that it gives them extra time to pay their taxes. This is simply incorrect. When you file a tax extension, you just get an extra six months (as an individual taxpayer) to file your return. It does not extend your tax payment due date, which remains April 15, or April 17, as it is this year. This means that you have to pay your taxes in part or whole, before the April deadline. Having filed a tax extension, you can file your return anytime before October 15. Ideally, you should pay your complete taxes by the April due date. Not doing so will leave you with the burden of paying interest or penalties on the amount.

Filing a Tax Extension

This is the easiest part. You would need to fill up Form 4868 either on paper or electronically. E-filing is the easier option, but if you choose to fill it on paper, you can have it delivered to the address corresponding to your residence as mentioned on the form.

Note: If you happen to be a fiscal taxpayer, you must fill Form 4868 on paper only.

If you decide to electronically file Form 4868, just access the IRS e-file on your own or seek the assistance of a tax professional. Once you file the extension, you will receive an electronic acknowledgment. You can pay your complete taxes due or in part using your credit card when you use the e-filing option. If you are unable to pay by credit card, print the e-file and send it along with your check or money order.

What are Your Payment Options

Option 1: Payment by Credit Card/Debit Card/EFTPS

Log on to www.irs.gov/e-pay. In case you choose the Electronic Federal Tax Payment System (EFTPS), you must enroll for it prior to paying taxes. Logging on to www.eftps.gov will give you further details. After the payment is made, you will receive a confirmation number. Please make sure to note it down and preserve it.

Having paid your taxes electronically, you must not file a paper form.

Option 2: Payment by Check/Money Order

When you send a check or a money order, make it payable to “United Nations Treasury”. Mention your SSN, phone number and “2011 Form 4868” on the check or money order. Sending cash is not permitted. Make sure not to staple or paste your check or money order to Form 4868. Mail it along with your form to the address corresponding to your residence as mentioned in the form.

Tax Extension Rules

✔ You cannot utilize the tax extension service, if you have been issued a court order asking you to pay taxes on a certain date and also if you want the IRS to figure your amount due.

✔ If you are deemed as a citizen or resident living outside the country, or if you are an individual serving in the armed forces, and happen to be posted out of the country on April 15, you are due for an automatic two-month extension. You need to attach a statement, which proves your eligibility along with your return.

✔ Filing an extension application is not allowed after the April due date.

✔ A return must be filed even if a refund is due to you, and if you’ve delayed filing it because you were expecting a refund, do think of filing a tax extension.

Points to Remember

✔ Filing a tax return on time is crucial in avoiding penalties. It goes a long way in reducing or limiting your tax burden.

✔ Filing a return on time makes it easy to claim any tax refunds that are due.

✔ Individuals who delay filing returns cannot get credits of Social Security retirement or disability benefits.

✔ If you do not file a return, it could indicate that you are concealing your self-employment income from the Social Security Administration.

✔ In case you are not in a position to pay your taxes by the due date, file for an extension and talk to the IRS, who will assist you by putting an installment option in place.

✔ The benefits of filing a tax extension can be reaped by citizens who live abroad, citizens or residents who think they cannot meet the tax filing deadline, and even citizens residing in combat zones.

✔ The IRS does not ask for any explanation when you file for a tax extension.

A delay in filing your tax returns attracts penalties. No one would consider it wise to pay penalties when you have the option of deferred filing. So, if you think you cannot file your return in time this year, be prudent and file for a tax extension.