Know about your tax extensions!

This is that time of the year and we all need to report federal individual income tax return by the due date. What next? you can use IRS Free File or any commercial tax products to prepare and report it with the federal agency. How about getting extra time to prepare the tax return? Yes, we would love to support you on this and this article is about knowing tax extensions.
Need more time to prepare your federal tax return? prepare Form 4868 and apply for an automatic extension of time to file. Form 4868 is a tax extension for individuals reporting their income to the IRS. This includes all taxpayers who file 1040s, contractors who file 1099s, as well as single-member LLCs and Schedule C Sole Proprietors. Filing an individual tax extension will extend your tax deadline to October 15. However April 18 is the deadline for most to pay taxes owed and avoid penalty and interest charges. Hope you’re aware that an extension of time to file your return does not grant you any extension of time to pay your tax liability.
Individual Tax Extension Form 4868

Filing Form 4868 gives you an Automatic 6 Months Extension. If you are out of the country, get an additional 2 months without filing a form. Get an additional 4 months extension by filing Form 4868.
Important Points:
  • You must file for an extension before the due date of your tax return (April 18th, 2017).
  • Filing an extension of time to file does NOT grant you an extension of time to pay. If you find you cannot pay the amount along with Form 4868, you can still get the extension. But you should pay as much as you can to limit the amount of interest you will owe. Also, you may be charged the late payment penalty on the unpaid tax from the regular due date of your return.
  • You do NOT have to explain why you need the extension. However you can file your tax return any time before the extension expires.
  • When you do file your tax return, do NOT attach a copy of Form 4868 to your tax return that is not required as IRS would have those details with them and would make a note of when they accept your automatic extension return.
  • Do NOT file form 4868 if you want the IRS to figure your tax, or if you are under a court order to file your return by the regular due date.
  • The IRS has changed the rules: you do not have to pay what you owe when you file your extension. The main purpose to filing an extension is to protect you against the assertion of a Failure to File penalty, which is 5% a month, up to 25% of the tax due. Filing an extension will protect you against the assertion of this penalty, provided of course, that you file your tax return within the 6 months allowed by the extension.
  • If you are due a refund, you only need to file an extension to,protect yourself against a later audit and an additional assessment of tax. In that situation the IRS can impose a Failure to File penalty on the amount of the additional tax that was not paid by the due date of the return, and where there was no extension filed. So if you are due a refund when you filed your return, and the return is filed after the due date, and you have not filed for an extension, and it is later determined that you owe more tax, the IRS can penalize you up to an additional 25%.for a Failure to File penalty.
Electronic Filing for Form 4868
You can get an automatic extension of time to file your tax return by filing Form 4868 electronically at http://extensiontax.com. You will receive an electronic acknowledgment once you complete the transaction and IRS accepts it. Keep it with your records for reference and no need to mention that when you report your individual tax return. If you think you may owe tax when you file your return, you will need to estimate your total tax liability and subtract how much you have already paid.
Individual Tax Extension Form 4868

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