Filing for a Tax Extension (Taxes: Part I)
Albert Einstein once said, “The hardest thing in the world to understand is the income tax.” This episode is one of a two-part series on your federal income taxes.
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A tax return is a complicated endeavor that requires many forms and careful attention to detail. You might be missing forms such as an employer’s W-2 that would prevent you from accurately completing your return. Or, you may have invested in a partnership that has not yet paid you for your investment, which might count as your income. If you cannot accurately complete your return, you should file for an extension.
First, the mechanics of filing for an extension to file are pretty simple. All you must do is file Form 4868 from the United States Treasury department. (http://www.irs.gov/pub/irs-pdf/f4868.pdf) You are not required to indicate a reason for filing for an extension. The IRS will only contact you if your extension is denied.
You only need to fill out the form and file it by April 17. If you timely and properly file, then you will get a six-month extension and do not need file your return until October 15. If you e-file, and your extension is rejected, you have until April 21 to correct your e-filing. If you cannot correct your e-file, then you must file for an extension in paper form by April 21.
Again, it is important to note that an extension for filing your return is not the same as an extension to pay your taxes. When completing Form 4868, you will need to estimate your total tax liability for 2006 and subtract any income tax you have already paid. You will find that by completing the estimate portion of Form 4868, you will perform most of the calculations you need to complete your return. So, consider just buckling down and finishing your return in full.