So you’ve heard something about IRS Form 4868 (more commonly known as a tax extension), but you don’t know anything about it. The good news is that, compared to other tax forms, this one is pretty straight forward. The bad news is that it is still a tax form, so there are still ways to get confused. Hopefully this post will answer all of your questions.
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It’s only November, but already reasons to file a tax extension next year are rearing their head.
On November 6, a new law that went into effect that extends the first-time homebuyer credit five months and expands the eligibility requirements for purchasers.
According to the IRS, The Worker, Homeownership, and Business Assistance Act of 2009 extends the deadline for qualifying home purchases from Nov. 30, 2009, to April 30, 2010. Additionally, if a buyer enters into a binding contract by April 30, 2010, the buyer has until June 30, 2010, to settle on the purchase.
A quick thank you for being listed on the 100 Money Experts You Should Follow and Learn From on Twitter list. Out of the 100 Twitter accounts listed, we are just one of 10 recommended for taxes.
We appreciate the support. And, yes, when it comes to filing a tax extension we do consider FileLater to be pretty special if we do say so ourselves. After all, we are the only place where you can file both a business tax extension and a personal tax extension.
In a recent press release the IRS stressed a couple of points they want taxpayers to heed:
“The IRS encourages taxpayers to choose direct deposit when they file their returns because it puts an end to lost, stolen or undeliverable checks. Taxpayers can receive refunds directly into personal checking or savings accounts. Direct deposit is available for filers of both paper and electronic returns.
The IRS also encourages taxpayers to file their tax returns electronically because e-file eliminates the risk of lost paper returns. E-file also reduces errors on tax returns and speeds up refunds.”
In the same statement, the IRS went on to add, “E-file coupled with direct deposit is your best option; it’s easy, fast and safe.”
I’m in complete agreement. e-Filing is a no-brainer for so many reasons. And as I mentioned in my last post, more and more people are e-Filing these days.
Remember, e-Filing isn’t just for your 1040. You can e-File a tax extension as well.
The IRS reported come interested numbers today about the recently completed 2008 tax season:
A record 95 million individuals e-filed their federal income tax returns during 2009, up almost 6 percent from last year’s total of nearly 90 million. About two out of three taxpayers e-filed this year; out of the 141 million returns filed so far this year, over 67 percent were e-filed, compared to 59 percent last year.
The IRS added that more taxpayers choose to e-file their tax returns each year. While the total number of tax returns has increased 10 percent during the past decade, the number filed electronically has increased by 168 percent. Taxpayers who e-file from a home computer continue to be an increasingly significant segment of those who e-file.
With the October 15 deadline fast approaching, our support team has been busy answering one common question:
I don’t have time to finish my taxes by October 15, can I get an extension on my extension?
The answer is NO.
Unfortunately, the days of the second extension are over. The IRS only allows one 6-month extension to file form 1040.
Your only choice is to file your taxes. If your 1040 and money you owe the IRS is not filed on time, it may be subject to penalties and late fees.
If your problem is that you can’t possibly pay what you owe, I suggest you read the IRS’ recommendation on how to setup an Installment Agreement (otherwise known as a payment plan).
Between April 15 , the IRS income tax deadline, and October 15, the extended IRS income tax deadline, we often have customers ask if there is an advantage to filing income taxes now, or waiting until close to October 15. Here are few considerations to make as you decide if it’s time to get your 2008 taxes submitted:
If you expect to get a refund, the sooner you file the sooner you get your money. For those who expect to owe and have not made an estimated payment when their income tax extension was filed, the IRS is slowly but surely accumulating interest on what you owe them. However, if you did make a payment with your extension, there’s nothing to worry about.
If you extended because you had trouble finding a CPA, or your CPA was charging a last minute premium near April 15, realize that there’s another busy period for CPAs as we near the extended tax deadline (although nothing compared to the April 15 rush). You can do yourself, and your CPA, a favor by not waiting until the last minute.
The IRS generally doesn’t allow additional extensions beyond the October 15 extended deadline. So, you’ll want to make sure you are on track to get your taxes submitted by the extended deadline, or you could be faced with stiff penalties by the IRS.
