It’s been a crazy couple of days at work. And it’s only going to get worse before it gets better. Our tax preparation team, which I manage, received a mountain of returns last week from clients wanting to meet the April 15th deadline. We are gearing up to make our last push; so I’ve been working late and will spend some quality time in the office the next few weekends.
My only solace is that April 15th isn’t truly the end of the filing season. The IRS gives you more time to file your return if you can’t make the deadline. You just need to know how to ask.
The all-important form that you need to file 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 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 your balance due, you will owe interest when you do file and may incur a failure to pay penalty. (Although owing a balance or filing the form without payment doesn’t negate the extension.)
The last thing to 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. You have three years from the return due date to file your return and still receive the refund. I suggest you file as soon as possible to start putting your money to work.
We have already begun filing extensions for clients that we know will need it. It helps take some of the anxiety out of the deadline that many people have come to fear. If you get down to the wire and don’t think you can meet the deadline, be sure to keep Form 4868 handy.