How to file tax extensions?

How to File Tax Return Extensions by the Deadline

• Answer:

  Although you may want to file your personal tax return before the April 15th deadline, there are situations where you are not able to do that. For example, you may not have received your K-1 from a Partnership or S Corporation. If these are prepared by an accountant other than your own, it is likely that you will not be able to file your tax return on time. Similarly, you may have requested additional information from an investment firm, such as Merrill Lynch or Citigroup/Smith Barney, regarding stock sales that will not be available until after April 15th. In the event you are not able to file your personal tax return by the April 15th deadline, if you file an extension, you will automatically receive an additional six months to prepare the return and protect yourself from penalties and interest for not paying taxes due. Difficulty: Moderate Things You'll Need IRS Form 4868 Current year tax documents, if available Copy of prior year's tax return Pencil Calculator Instructions Prepare the Extension Obtain IRS Form 4868. This form is used to estimate your total tax liability and file an automatic six month extension to prepare your tax return. Instead of your tax return being due April 15th, it will be due October 15th as long as the form is filed on time and you make a payment for your estimated tax liability. Complete boxes 1 through 3 with your personal information on Form 4868. Estimate your total tax liability and enter it on line 4 by completing your personal tax return, Form 1040, with the information you already have. For missing information, estimate to the best of your ability. Based on your current year income and expenses, use the IRS tax tables to calculate the tax liability. Form 1040, line 60 will show your total tax liability. Enter your total income tax payments for the year on line 5 of Form 4868. This can be found on line 71 of the Form 1040 you prepared in Step 3. You should not have an amount on line 68 of Form 1040. Line 68 represents the amount you will pay with Form 4868 to receive the automatic extension of time to file. Subtract line 5 from line 4 on Form 4868 and enter on line 6. This represents the amount of income tax you have not paid for the year. Enter the amount you will be paying with the extension on line 7 of Form 4868. To avoid penalties and interest, this amount should closely approximate the amount calculated on line 6 of Form 4868. Check box 8 of Form 4868 if you are a U.S. Citizen and out of the country when Form 4868 is due (April 15th). By checking box 8, you will be able to file the Form by June 15th and receive an additional four months to file your personal tax return. Essentially, box 8 allows you to extend the time to file Form 4868 but not the time to file Form 1040. Check box 9 of Form 4868 if you are filing Form 1040-NR or 1040-NR-EZ. Individuals filing Form 1040-NR or 1040-NR-EZ are those who received wages that are not subject to U.S. income tax. Form 4868 is still due by April 15th, even though Forms 1040-NR and 1040-NR-EZ are due June 15th. An automatic extension will be granted through October 15th. Pay the balance due per line 7 of Form 4868. If you elect to pay by credit card or debit card over the phone, call one of the three service providers listed in Form 4868. The processing fee imposed by the service providers will be announced before the transaction is completed and you will have the option to continue or cancel the transaction. At the end of the transaction you will be given a confirmation number. You do not need to file Form 4868 if paying by credit or debit card. Retain Form 4868 for your records. If you elect to have your accountant e-file Form 4868, you can pay the balance due by electronic funds transfer. Form 4868 will be sent directly to the IRS via the e-filing system. Retain a copy of Form 4868 for your records. If you chose to pay the balance due by check or money order, mail Form 4868 with the payment to the correct address included in the instructions based on where you live. Checks and money orders need to be payable to "United States Treasury" and should include your social security number, daytime phone number and "2009 Form 4868" in the memo for accurate processing. Retain a copy of the check or money order and Form 4868 for your records. Submit payment with Form 4868, if applicable, by April 15th to ensure you will be granted the automatic six month extension of time to file Form 1040.