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William Byrnes (Texas A&M) tax & compliance articles

Only 2 days left to file a tax return? 5 tax tips for request an extension until October 15

Posted by William Byrnes on April 13, 2014

In Tax Tip 2014-52, the IRS provided the elements of possible relief for taxpayers that now realize – only 2 days left to file a tax return.  File an extension to file the tax return instead, allowing the taxpayer 6 months breathing room until October 15, 2014, to file the return.

What a Taxpayer Should Know to Request More Time to File a Tax Return!

A taxpayer can electronically file Form 4868 (PDF), Application For Automatic Extension of Time To File U.S. Individual Tax Return; and (2) pay all or part of your estimated income tax due using a credit or debit card or by using the Electronic Federal Tax Payment System (EFTPS).  However, a taxpayer can still file a paper Form 4868 by mail.  Filing this form gives taxpayers until Oct. 15 to file a return. To get the extension, taxpayers must estimate their tax liability on this form and should also pay any amount due.

By properly filing this form, a taxpayer will avoid the late-filing penalty, normally 5% per month based on the unpaid balance, that applies to returns filed after the deadline.  In addition, any payment made with an extension request will reduce or eliminate interest and late-payment penalties that apply to payments made after April 15.  The interest rate is currently 3% per year, compounded daily, and the late-payment penalty is normally 0.5 % per month.

5 tax tips for filing an extension

1. A taxpayer should file on time even if unable to pay the tax due.  If a taxpayer completes a tax return but can not pay the taxes owed, do not request an extension.  Instead, the taxpayer should file the tax return on time and pay as much as possible to reduce the amount owed.  At least the taxpayer will avoid the hefty late filing penalty, which is much higher than the penalty for not paying all of the taxes owed on time.

2. Use IRS Free File to request an extension.  A taxpayer can use IRS Free File to e-file Form 4868 (PDF) Application For Automatic Extension of Time To File U.S. Individual Tax Return. The extension request must be filed by midnight on April 15.  E-filed extension request will receive an IRS receipt.

3. Mail Form 4868.  A taxpayer may still mail the request for an extension Form 4868.  The envelope must be postmarked at the post office by April 15.  The safest way to guarantee such a postmark is to bring the envelope to the post office counter during office hours.

4. Extra time to file is not extra time to pay.  An extension to file will allow six additional months to file a tax return, until Oct. 15.  However, it does not provide extra time to pay the tax due by April 15.  Thus, a taxpayer must estimate and pay the tax owed by or on April 15.  Any amount not paid by April 15 will be charged interest. Moreover, the IRS may levy a penalty for not paying the tax on time.

5. Payment Options Moreover, a taxpayer can use payment options.  Apply for a payment plan using the Online Payment Agreement tool.  Or a taxpayer can file Form 9465, Installment Agreement Request, with a tax return. If a taxpayer is unable to make payments because of a financial hardship, the IRS will work on a payment plan with the taxpayer.

2014_tf_on_individuals_small_businesses-m_1For over 110 years, National Underwriter has provided fast, clear, and authoritative answers to financial advisors pressing questions, and it does so in the convenient, timesaving, Q&A format.  “Our brand-new Tax Facts title is exciting in many ways,” says Rick Kravitz, Vice President & Managing Director. “First of all, it fills a huge gap in the resources available to today’s advisors. Small business is a big market, and this book enables advisors to get up-and-running right away, with proven guidance that will help them serve their clients’ needs. Secondly, it addresses the biggest questions facing all taxpayers and provides absolutely reliable answers that help advisors solve today’s biggest problems with confidence.”

Robert Bloink, Esq., LL.M., and William H. Byrnes, Esq., LL.M., CWM®—are delivering real-life guidance based on decades of experience.  The authors’ knowledge and experience in tax law and practice provides the expert guidance for National Underwriter to once again deliver a valuable resource for the financial advising community,” added Rick Kravitz.

Anyone interested can try Tax Facts on Individuals & Small Business, risk-free for 30 days, with a 100% guarantee of complete satisfaction.  For more information, please go to www.nationalunderwriter.com/TaxFactsIndividuals or call 1-800-543-0874.

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