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Need More Time? File for a Tax Extension

Need More Time? File for a Tax Extension - TaxACT

Do you need just a little more time to gather the information for your income tax return? Or, truth be told, have you not even started yet?

Don’t worry – it’s easy to get an extension to file your return. You just need to tell the IRS you need more time, using Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return.

Neglecting to file without an extension can mean penalties for failure to file down the road.

However, by filing a simple form with the IRS, you’ll get a generous amount of additional time to finish the job.

Not long ago, the automatic extension – the one you can get with no explanation or reason whatsoever – only lasted four months, until August 15.

If you needed more time, you had to explain your reasons to get another two-month extension after that.

Now, the automatic extension for everyone is for six months. That should be plenty of time to find your information and complete your return.

Good reasons to file a tax extension

Filing for an extension is a good idea if you have income or other tax information coming from partnerships or other entities, and you don’t get the information in time to file your return.

If you’ve been ill, going through a family crisis, or on a round-the-world cruise (lucky you!), you also have a great reason to file an extension.

It’s a good idea to file for an extension when you almost have your return finished, but you’re looking for a few more receipts, or you want to give your return one more review.

It’s better to take your time and make sure your return is accurate and you are taking all the tax breaks you are entitled to.

When to avoid filing a tax extension

If you may owe additional tax, but you don’t know how much, filing an extension can be a bad idea.

If you don’t pay enough with your extension, you could owe interest and penalties on the shortfall.

If you have a refund coming, or if you pay more tax with your extension than you needed to, you are letting the government hold your money for free.

Most of us could put that money to better use – to pay down consumer debt, if nothing else.

If you just haven’t gotten around to filing, or if you’re just busy, you can still file for an extension.

However, habitually filing for an extension every year is not a good idea. It doesn’t get any easier to find papers or remember details several months from now. You might as well get filing your taxes over with.

How to file a tax extension

It’s important to estimate your tax liability as closely as possible if you may owe tax.

Go through the Q&A steps, entering the best information you have available. When you get to the Filing step, you can enter information for an extension.

To go directly to the section for filing an extension, click the Filing main tab, and then click the File Extension tab.

After you finish the section, print or e-file Form 4868.

Do you like to get your return done early in the tax season, assuming you have all your information in time?

Photo credit: ZORIN DENU via photopin cc

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About Sally Herigstad

Sally Herigstad is a certified public accountant and personal finance columnist and author of Help! I Can't Pay My Bills, Surviving a Financial Crisis (St. Martin's Griffin). She writes regularly at CreditCards.com, Bankrate.com, Interest.com, RedPlum, and MSN Money. She is an experienced speaker and a member of Toastmasters International. Follow Sally on Twitter.