LEST YOU FORGET
1. Tax payments are due to Internal Revenue Service (IRS) by April 15 of the year at the latest.
2. Payment due date is not affected by postponement of filing date.
3. Any remittance you make with your application for extension of filing date is considered as payment of taxes.
4. Any tax unpaid after the payment due date carries interest charges as penalty.
5. Late payment penalty and late filing penalty are not the same: they are different charges.
If you can’t complete your federal tax return by the April 15 deadline then you should request for extension of filing date on File IRS Form 4868, Application for Automatic Extension of Time to File. This enables you to postpone the filing up to six months with a final deadline on October 15. You do not have to give a reason for the extension.
Form 4868 can be used to apply for extension to file Forms 1040, 1040A, 1040EZ, 1040NR, or 1040NR-EZ.
But remember, this only postpones the act of filing but not the payment of any tax due. You are to estimate the tax payable if any and send it by check along with Form 4868 by April 15.
Do not send cash.
Make your check or money order payable to the “United States Treasury.” Usually your social security number, daytime phone number, and the year of assessment and the words Form 4868 are required on the memo/message space on your check or money order. Do not staple or attach your payment to Form 4868.
Make sure to address your mailing envelope to the appropriate IRS servicing center assigned to your state from the instructions to Form 4868.
If you don’t make a payment for any taxes due by the payment due date, you could be liable for penalties and interest, even if you file for an extension.
TELEPHONIC OR ELECTRONIC FILING FOR EXTENSION
Alternatively, you can file for an extension by phone or over the Internet through an authorized service provider details of which are in the instructions for Form 4868. You make payment by credit card (American Express, MasterCard, Visa, or Discover Card). In the latter case, your payment must be at least $1 and expect to pay an additional convenience fee (service charge) based on the amount of your payment. Always remember to note the confirmation number and keep it for your records.
ACH WITHDRAWAL FROM BANK ACCOUNT
This will require the routing number and account number of your bank account as well as your authorization for IRS to withdraw the due tax amount from it.
REFUSAL OF EXTENSION
If the IRS thinks your estimate is unreasonable, they may disallow your extension, send you a notice regarding the termination of extension (approximately 10 days before that date of such termination) and assess a penalty for filing late tax returns.
FILING YOUR REGULAR TAX RETURN
You can file your tax return any time before the extension expires. Do not attach a copy of Form 4868 to your return.
INTERESTS AND PENALTIES
If you underestimate your taxes, you’ll have to pay interest on extra amount unpaid by April 15.
If you pay less than 90 percent of the tax you owe, you owe to the IRS a monthly penalty of 0.5 percent of the underpayment until the balance is fully paid.
– LATE PAYMENT PENALTY
The late payment penalty is usually 0.5% of any tax (other than estimated
tax) not paid by the regular due date. It is charged at this monthly rate for the period including part of a month the tax is unpaid. The maximum penalty is 25%.
At the discretion of the IRS the late payment penalty may be waived, if you can show a REASONABLE cause for your late payment by attaching an explanatory statement to your REGULAR return (not to Form 4868).
You can reasonably expect to have this penalty waived when you make payment for at least 90% of your actual tax liability while submitting Form 4868.
– LATE FILING PENALTY
A late filing penalty is usually charged if your return is filed after the due date (including
extensions). The penalty is usually 5% of the amount due for each month or part of a
month your return is late. The maximum penalty is 25%.
If your return is more than 60 days late, the minimum penalty is $100 or the balance of the tax due on your return, whichever is smaller.
As before, at the discretion of the IRS, this penalty may be waived if you can satisfactorily provide a REASONABLE cause on a separate statement attached to your REGULAR return (not to Form 4868).
* SPECIAL SITUATIONS *
IF YOU WILL BE OUT OF THE COUNTRY ON DUE DATE
A resident taxpayer no longer gets an automatic filing extension just for being outside the country. You have to follow the same procedure as above to get a six month extension of the filing date.
FORM 1040NR OR 1040NR-EZ FILERS
ONLY if you are a US citizen or resident living outside USA and Puerto Rico, with your main workplace also outside USA and Puerto Rico, you are allowed 2 extra months to file your return and pay any amount due by June 16 without requesting an extension.
If you need an additional 4 months to file your return, then you will apply for extension using Form 4868 after checking the box on line 8 to indicate your out-of-the-country-status.
If you did not receive wages as an employee subject to U.S. income tax withholding and your return is due June 16, check the box on line 9 in the form.
This additional four-month extension is for filing date only and not for payment. Interest and penalty may be charged on any tax not paid by June 16.
FOREIGN RESIDENCE / PRESENCE
– US EXPATRIATES LIVING AND WORKING ABROAD
If you live outside the United States and Puerto Rico and your main place of work is outside the United States and Puerto Rico you may come under this category and may enjoy some tax exemptions
For a longer extension, in anticipation of such tax exemption on your foreign income, you may file Form 2350 either with the Internal Revenue Service Center in Austin, TX 73301, or with a local IRS representative. You have to file this special form before the due date for filing your REGULAR return, which is June 16.
EXTENSIONS FOR ARMED FORCES PERSONNEL
– COMBAT ZONE / HAZARDOUS AREA SERVICE
Armed forces personnel serving in combat zones and get a MINIMUM of 180 days after the later of EITHER the last day of duty in such zone or area OR the last day of continuous qualified hospitalization for injury sustained while serving in that area. Hospitalization inside USA is restricted to five years for calculation.
Spouses of such personnel get similar extension except for the period of the personnel’s hospitalization inside USA.
Support personnel under the direction of the armed forces like their civilian staff, Red Cross Personnel and accredited correspondents also are offered similar extensions
– AUTOMATIC EXTENSION FOR SERVING ABROAD ON APRIL 15
If you are serving with the armed forces outside USA and Puerto Rico on the regular filing deadline, you get automatic 2 month filing extension.
– “PAYMENT” EXTENSIONS FOR THOSE ENTERING ARMED FORCES
You may get this payment extension until six months from the date the service ends, if you are unable to pay when you enter the service. But your spouse is not eligible for this benefit.
CLAIMING CREDIT LATER FOR PAYMENT MADE WITH FORM 4868
When you file your REGULAR return later before the extended dateline, include the amount of any payment you made with Form 4868 on the appropriate line of your tax return. Usually this line reads as ” …estimated tax payments….”
If you and your spouse each filed a separate Form 4868 but later file a joint return, enter the total paid with both Forms 4868 on the appropriate line of your joint return.
If you and your spouse jointly file Form 4868 but later file separate returns, you can enter the total amount paid with Form 4868 on either of your separate returns OR you and your spouse can divide the payment in proportionate amounts. Each separate return should have the social security numbers of both spouses for reference.
REQUEST FOR PAYMENT BY INSTALLMENT
If you cannot pay the tax due for by the extended date of October 15, you may attach Form 9465 when you file your 1040/ 1040A/ 1040EZ/ 1040NR/ 1040NR-EZ return to request an installment arrangement.
EXTENSION FOR FILING GIFT/GENERATION-SKIPPING TRANSFER (GST) TAX RETURN
An extension of time to file your REGULAR income tax return also extends the time to file Form 709. However, it does not extend the time to pay any gift or GST tax you may owe for the tax year. As usual late payments may render you liable for interest and penalty charges. See the instructions for Forms 709 and 8892.
DELAY IN PROCESSING EXTENSION REQUEST
If you changed your name after you filed your last return for any reason including marriage or divorce, and did not inform your local Social Security Administration office, that may delay processing your extension request.
APPLYING FOR EXTENSION OF STATE TAX FILING
To apply for extension of filing date for state taxes, you should refer your state tax authority’s website or publications. State tax rules for extension can vary from state to state.
This is a layman’s general introductory guide to filing for tax extensions. Only the barest information on the subject is dealt with here.
For more accurate and authoritative information and the latest tax laws as applicable to individual situation, please consult the definitive IRS references cited below. The information above pertains to the tax year 2007 and the months dates stated are as applied to calendar year tax payers only.
IRS Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad