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Extension Filing Tax

Nothing is more important when it comes time to file your tax return than having all applicable documentation ready, whether you have W2's, 1099's, receipts or school credit forms. Sometimes, due to a company's lateness in sending your forms or because of an address change, you may not have all the documentation necessary to file your return. If that turns out to be the case, all you need to do is file for an extension by the due date of your return, generally April 15th of that year.

The form to file is Form 4868 which usually grants you a six month reprieve. You may file Form 4868 electronically and a late filing penalty will not be imposed if you don't submit a payment if you are able to make a good faith estimate of your liability based on the paperwork you have available at the time of filing. Remember that just because an extension was granted without payment doesn't mean that you won't be subject to interest charges and penalties because those still stand.

If you are able to file your return with the extension period, you would than enter on the appropriate line any tax payment made when filing the extension and include the balance of unpaid tax, if any. Note that even though an extension is automatically granted if Form 4868 is properly filed, the IRS has the authority to terminate the extension by mailing you a notice ten days prior to the termination date designated in the notice.

To touch on those penalties and fees again, even if you obtain a filing extension and paid such taxes including withholdings that you have thus far estimated, if you pay less than 90% of the total amount due, you will be subject to a late payment penalty.

You also have to remember to file an extension for state taxes and each state usually has their own tax extension form and like the federal extension, they allow for a six month extension after meeting the filing deadline. Not filing your states extension form opens you up to additional late payment penalties.

Finally, even if you're entitled for a refund and will not owe taxes at all, the IRS and most states still require that you file for a tax extension. The good news is, there are no additional fees, penalties or interest charges due.

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