Two days left!

You only have today and tomorrow to file your income tax return before the IRS’ first filing deadline. Luckily, you can get more time, if you know how to ask.

The all-important form that you need to request an extension is Form 4868. You can file the form online if you or your tax professional has Efile access. Or you can mail the paper form into one of the IRS service centers. (You can find your particular service center on the form’s instructions.)  If you choose to mail the form, make sure to get it postmarked by 4/15. 

The 4868 is pretty straightforward. You fill in your contact information (name, address, and social security number), estimate your tax liability, and make a payment if you need to.

Some people freak out about the balance due estimation because the IRS says in the instructions: “If we later find that the estimate was not reasonable, the extension will be null and void.“ However, you just need to make the best estimation with the information you have.

So, if you had a balance due the year before and are making a similar amount of income, you will likely owe about the same. You can also adjust accordingly for any increase or decreases in your income.

If the IRS accepts your extension request, you get an additional six more months to file your return. But, you should know that the extension only gives you additional time to file, not to pay. If it turns out that you didn’t properly estimate and pay your balance due, you will owe a failure-to-pay penalty. (Although owing a balance or filing the form without payment doesn’t negate the extension.)

The failure-to-pay penalty is ½ of 1 percent of your unpaid taxes for each month or part of a month after the due date, up to 25 percent of your unpaid taxes. This is much lower than the failure-to-file penalty that you would incur if you don’t file on time and don’t file an extension. That penalty is 5 percent of the unpaid taxes for each month or part of a month that a return is late (also up to 25 percent of your balanced owed).

Keep in mind is that you don’t need to file an extension if you know you’re getting a refund. A refund means the Government actually owes you money. If that’s the case, you have three years from the return due date to file and still receive your refund. I suggest you file as soon as possible to start putting your money to work.

If you get down to the wire and don’t think you can meet the deadline, be sure to keep Form 4868 handy.