How to get more time to file federal and state tax returns
Sunday, April 13, 2014
The hubby and I typically owe Uncle Sam every April 15. Usually not much, but some.
We also tend to file for an extension. This is because I fill out our joint return and I have other things taking up my time during the first three-and-a-half months of the year.
The six-month delay afforded by submission of Form 4868 also gives me, a sole proprietor, extra time to max out my prior-year contribution to my self-employed retirement account.
If you are in the same do-it-later situation as the hubby and I, welcome to a pretty large club. Around 10 million folks each year need more time to finish their 1040s.
And today's Daily Tax Tip is for us. It looks at the three ways to request an automatic extension of time to file our annual federal tax returns.
1. E-file Form 4868
Electronically asking for more time is the Internal Revenue Service's preferred method.
If you use tax preparation software, it will give you the option file 4868. You also can use Free File to send in the extension request form if your adjusted gross income last year was less than $58,000. If you made more, you can e-file your extension request via Free Fillable Forms.
When you file your Form 4868 electronically you will receive an acknowledgement or confirmation number for your records.
You'll also be "offered" ways to pay part or all of what you owe. The quotation marks are there to emphasize that it's not really a request from the IRS.
If you don't hand over that due tax money with your 4868, you'll end up facing penalty and interest charges on the unpaid amount when you finally finish your filing task.
But even if you can't pay anything, go ahead and file Form 4868. That will protect you from the failure to file penalties, which are steeper than the failure to pay penalties.
2. Snail mail Form 4868
Although the IRS is trying to wean us off paper, it's still an option (for now). And since Form 4868 is so short, it's not a problem to fill it out by hand.
If you choose this option, be sure you mail your request to the appropriate address shown in the table below by April 15.
3. Electronically pay what you owe
In some cases, a form isn't even necessary. An extension request is automatic if you pay all or part of your income tax due using a credit or debit card or by using the Electronic Federal Tax Payment System (EFTPS).
That's what I did this year.
Previously, I used option 2, snail mailing our paper extension request and check payment to the IRS. But since the float time of paper checks is negligible nowadays, I decided this year to use EFTPS.
When I logged on to EFTPS to make our first estimated tax payment for 2014, I also scheduled an extension payment of the amount of tax we expect to owe when we/I finally fill out our 2013 Form 1040 with more precise numbers.
It was a logical, and easy, move since both payments are due on April 15.
If you opt for this extension method, be sure to note the confirmation number -- not that I don't trust my wonderful readers, but I erased my number (and payment amount) in the receipt image above -- that you get for making your extension payment, either by EFTPS or credit/debit payment, by the due date. That's your proof of asking for the extra time on time.
Whichever extension option you choose, do it by April 15. And remember to pay what you owe!
Added filing time for states, too: What about your state tax return? Most states that collect income taxes from their residents also follow the IRS' April 15 filing deadline.
The good news, though, is that you probably don't have to file a separate extension request with your state tax office. Since most of those states also use your federal return information as the starting point for your state filing, when you ask the IRS for extra time, it's automatic at the state level.
Here, for example, is the official word from the Missouri Department of Revenue:
If you receive an extension of time to file your federal income tax return, you will automatically be granted an extension of time to file your Missouri income tax return. Attach a copy of your federal extension (Federal Form 4868 or 2688) with your Missouri income tax return when you file.
But states tax collectors are just as strict about owed tax as is the IRS.
Again, from the Show Me State's official tax website:
If you expect to owe income tax, file Form MO-60 with your payment by the original due date of the return. An extension of time to file does not extend the time to pay. A 5 percent addition to tax penalty will apply if the tax is not paid by the original due date, provided your return is filed by the extension due date.
To make sure you don't run afoul of your state's filing extension rules, double check with its tax department.
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