In a survey earlier this tax filing season by Credello, more than three-quarters of respondents said they know what they're doing when it comes to filing their taxes.
Not that I'm questioning the poll participants' honesty, but taxes are not really the area where you want to fake it 'til you make it. If you try, the Internal Revenue Service likely will be along shortly to take it, it being your money.
That's why if you're just now discovering that filing your taxes this year are not as easy as you had expected, thanks to some COVID-19 law changes and more revisions to Form 1040 and, well, life, then don't file.
Getting more tax time: Let me qualify that. Don't file a poorly filled out 2020 tax return.
Instead, request an extension and get five more months to complete your return. Or find a tax pro who'll take you as a client during this year's May 17 to Oct. 15 extended filing period.
The good news is that fling for an extension is easy. More on this in a minute.
The bad news is that if you put off filing because you owe taxes, you're still going to have to pay them when you file for your extension. The IRS gives you extra time to finish up your tax paperwork. It does not give you extra time to pay your tax bill.
There's a form for that: I can't help you with ways to come up with any tax you must pay, but I can direct you to the process to get more time to file your 1040.
You'll need to send Form 4868 to the IRS by the annual filing deadline, which as you already know is Monday, May 17, for most taxpayers. (All Texas, Oklahoma, and Louisiana taxpayers, as well as some filers in Kentucky, Alabama, and now Tennessee get later tax filing deadlines because of major disasters in those states earlier this year.)
That the form below (as well as now added to the ol' blog's Tax Forms Fiesta! page). It's just a brief document at the bottom quarter of the form's first page, which also contains filing instructions.
Form 4868 instructions are pretty self-evident on the form itself. And as shown above, you'll have to enter:
- Your name (and spouse's name if filing jointly) and address,
- Your Social Security number (and spouse's nine ID digits if filing jointly),
- An estimate of your total tax liability for 2020 (yep, the IRS is serious about getting money along with your extension request),
- Total of what you have already paid in taxes last year (this includes withholding and any estimated tax payments you made), and the biggie
- How much (if any) you're paying with your extension filings.
How to file 4868: Like many other IRS forms, you can submit your extension request electronically.
If you use tax software, your program of choice should help you complete and submit it. You also e-file Form 4868 if you use Free File, the IRS-tax software companies' online cost-free tax filing option. This filing season, you can choose from nine Free File participating software companies if your adjusted gross income is $72,000 or less, regardless of filing status.
If you e-file, be sure to do so by Monday, May 17. That's not just because that the deadline to get the filing extension and avoid late-filing, late-paying penalties, but also because the IRS is cutting off electronic extension filings on May 18.
If you miss the May 17 Form 4868 e-file deadline, or you simply prefer paper, you'll have to mail your extension request to the appropriate IRS location shown below:
You'll see that there are different U.S. Postal Service mailing addresses depending not only on where you live, but whether you're submitting a payment with your Form 4868 or sending in just the form.
Maybe you're not sending in any cash because you just don't have it. Or maybe you set up a payment plan with the IRS. Of maybe you don't owe anything, but still want to get more time to file.
Whatever your extension situation, if you're snail mailing your request, send it to the proper IRS office.
Paying your well-guesstimated tax due: Lots of folks who get extensions, however, do so because they mistakenly think it will give them more time to file. By now, you've discovered that's not correct.
So it's time to decide how to pay what you owe so that your 4868 filing will be complete.
If you're mailing the paper form, you can include your check or money order, made payable to the U.S. Treasury, with the request.
Electronically, you have more options. Just go directly to one of the IRS-approved e-pay options. Two popular and easy options are:
- Direct Pay, which as the name says, directly transfers the amount from your bank account;
- Credit or debit card.
There's also the Electronic Federal Tax Payment System, or EFTPS, which is what I've used for years. But this has to be set up beforehand. You might want to consider it for future tax payments beyond extension requests.
When you do pay online (or by phone, if you prefer), you'll receive a confirmation number. Note that number and keep it for your records.
If you're like me and like paper verification to back up your digital transactions, print out Form 4868 and enter your extension payment confirmation number on page 3 of that form.
And one of the neatest things about e-pay extensions, if you can call paying the IRS neat, is that you don't have to send in an actual Form 4868. Your extension will be automatically processed when you pay part or all of your estimated income tax electronically.
Extend, pay, get it right: The key if you owe and need more time to finish your Form 1040 is to make some payment with your extension, even if it's not the total due. That will show the IRS that you know you owe and are making an effort.
Plus, any interest and late-payment penalty amounts on the ultimate balance will be less.
Once you get that extension and payment taken care of, you can use the next five months to concentrate on filing a correct (no mistakes, please!), complete (claim all your tax breaks!) tax return a bit later.
Tax attitudes: An extension also will free up some time to explore Credello's tax knowledge survey, which gets this weekend's Sunday Shout Out. Here's are some of the personal finance money management site's interesting tax findings:
- Millennials overestimate their tax knowledge more than other generations.
- Family members are the biggest tax influence for more than a third of people.
- Nearly a third of respondents said their biggest fear when filing taxes is finding out they owe money.
- Women seem to know more than men about taxes, even though men think they know more.
Do any of those tax takeaways sound familiar?
Not that it applies to my situation — the hubby leaves all taxes to me, and cheers me on, both in my tax blogging and doing our returns — but I'm definitely going to take a closer look at that gender tax knowledge findings.
You also might find these items of interest:
- Hawai'i is the lone holdout in making May 17 Tax Day 2021
- A long look at 2021 tax facts & a glimpse at all the Tax Days
- Tax Tips to help file your 2020 return: January, February, March, April, and May