Filing flexibility—up to a point
By Sara Peak from April 2014 Issue
It's that time of year again...or is it? While April 15 is the normal deadline for filing your personal federal income tax return, the Internal Revenue Service allows you to file for an extension under certain circumstances.
HOW TO FILE To file for a six-month extension, fill out Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. The IRS accepts Form 4868 in paper form as well as electronic form (e-file).
STEPS TO QUALIFY According to the IRS, to qualify for the extension, you must:
• Properly estimate your 2013 tax liability using the information available to you.
• Enter your total tax liability on Line 4 of Form 4868.
• File Form 4868 by the regular due date of your return.
PAYMENT DEADLINE NOT EXTENDED It's important to remember the extension is simply for filing and not for any taxes due. According to the IRS, "Although you are not required to make a payment of the tax you estimate as due, Form 4868 does not extend the time to pay taxes. If you do not pay the amount due by the regular date, you will owe interest. You may also be charged penalties."
SARA PEAK is a freelance writer with expertise in finance and wealth management. Have a money question? E-mail us at firstname.lastname@example.org.