by Charlotte Wood
(last updated February 21, 2009)
April 15 is known throughout the finance world as Tax Day. You have January through April 15 to get your taxes in order and to make all well, but sometimes that isn't enough. For whatever reason—not having the right paperwork, forgetting, or just not having the time you need to make everything accurate—you may need a tax extension. Fortunately you actually can be granted a tax extension and all you need to do is just file a bit more paperwork.
The form you need to fill out to receive your extension is tax form 4868 and if you fill it out before April 17 then you automatically receive a six month extension until October 15. The extension will typically be allowed without a tax payment at the time, but your taxes could be subject to interest and penalty charges even if it's within the extension date. While filing an extension does buy you some time to get your files and such in order, it is prudent to pay on time if possible because whatever taxes you pay after April 17, even with an extension are subject to interest and penalties. It seems a bit pointless to file an extension I know if you still have to pay extra, but if you do file an extension, you won't be charged with anything scary like tax evasion. A tax extension isn't a payment extension, but merely a filing extension; it may not seem fair or too logical, but that's how it is.
An automatic extension won't happen however just because you'll be out of the country. If you are going to be out of the country, you'll need to submit an extension claim and pay by credit card. Military personnel and American business owners who are stationed or have their business out of the country are still able to have the automatic extension.
Sometimes you may not be able pay your taxes by the extension date (October 15), but all is not lost if that is your predicament. You can file your return and attach the Form 9465 to your paperwork and then proceed to set up an installment payment plan. As long as you owe less than $10,000 in taxes then the IRS will work with you on a simple installment plan. You must show proof that you actually cannot make the payment and proof that you have paid your taxes in the past five years. You then set up a plan to pay your taxes within three years (of course if you can get that paid off any sooner, that's great!).
Taxes are a pain no matter where you go, but fortunately the IRS does allow you some wiggle room. If you need to file an extension you can do so, but do remember that you still have to pay your taxes on time and the process could be a bit complicated. April 15 may not be the official date you're done with taxes, but at least you can file them correctly!
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