To File by the 18th, or to File an Extension…Which is Best for me?
You may be surprised to find out that filing an extension does not extend the time you have to pay any tax due. You will owe interest on any amount not paid by the April 18 deadline, plus you may owe penalties. The IRS offers the following guidance regarding filing an extension:
1. File on time even if you can’t pay: If your return is completed but you are unable to pay the full amount of tax due, do not request an extension. File your return on time and pay as much as you can, if anything. The IRS will send you a bill or notice for the balance due. You pay the bill, or set up a payment arrangement at that point you set up a payment plan. Remember to only commit to what you know you are able to. You will be expected to make each payment. You may be surprised at how little they may allow you to pay back over a period of time, so don’t be afraid to ask!
2. Extra time to file: An extension will give you extra time to get your paperwork to the IRS, but it does not extend the time you have to pay any tax due. You will owe interest on any amount not paid by the April 18 deadline, plus you may owe penalties.
3. Form to file: Request an extension to file by submitting Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, to the IRS by April 18, 2011, or make an extension-related electronic credit card payment.
4. E-file extension: You can e-file an extension request using 1040Return.com on your own or by going to a tax preparer that uses the software. The IRS will acknowledge receipt of the extension request if you file by computer.
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