The April 17 tax deadline is rapidly approaching and many people are beginning to feel the squeeze. Several people from the Toledo area have mentioned they will not be able to have their returns complete by the deadline. I have advised them to file for an extension.
Filing for an extension involves obtaining the IRS Form 4868, Application for Automatic Extension of Time to File U.S. Individual Tax Return, preparing it and filing it on or before the tax deadline. This can be done electronically on line by going to the IRS website and obtaining the electronic IRS Form 4868, preparing it and e-filing it. If you are preparing your return by one of the many computer tax programs that are on the market, you should be able to find that form in your tax program that you can prepare and submit electronically. Then of course you can prepare it manually using paper Form 4868 and mailing it to the appropriate address provided on the Form. After submitting the form (electronically or manually) you will receive a confirmation number that you should retain for your records.
For Toledo and other Ohio residents needing to file for an extension on their state tax return they must first qualify for a federal extension. This is obvious since you need a completed Federal Income Tax Return in order to complete the state of Ohio Income Tax Return. Therefore if you need an extension for your federal return you are going to need an extension for your state return. Ohio does not have a state extension form but honors the federal extension. Therefore attach the federal confirmation record (i.e. your extension confirmation number for your federal extension or a printed copy of the federal acknowledgment) to your Ohio Income Tax Return.
Having obtained an extension allows a taxpayer six additional months to complete their return. Be aware that filing for an extension of time to file is NOT an extension of time to pay. If you suspect that you owe taxes on the return that is due on April 17 (even though you have an extension on that return) be sure to send in an estimated amount that you think you may owe prior to the filing deadline. To get an idea of what you may owe on this year’s return check your previous years’ returns for a comparison to come up with an estimated amount. Always add extra to that estimated amount to be sure you have covered your tax liability to avoid possible penalty and interest. You do not want to find out later after you have completed your return that your tax liability is greater than the estimated amount you submitted. Because if your liability is greater than the estimated amount you paid, the difference will be subject to penalty and interest. If the estimated amount you submitted is greater than your tax liability that amount will be refunded to you. This is applicable to both federal and state taxes.
If you do not have the funds to cover the estimated amount you think you owe by the tax deadline, be sure to contact the IRS or state taxing authority and tell them your circumstances. Typically they will make payment arrangements with you. This will help you avoid having to pay penalties even though you will still have to pay interest. This course of action should be followed anytime you cannot pay your taxes by the due date.
Should you need an extension for a return other than an Individual U.S. Income Tax Return listed below are few of the forms required for those returns.
- Form 7004 Application for Extension of Time to File U.S. Income Tax Return (For U.S. Citizens and Resident Aliens Abroad Who Expect To Qualify for Special Tax Treatment)
- Form 1138 Extension of Time for Payment of Taxes by a Corporation Expecting a Net Operating Loss Carryback
- Form 2350 Application for Extension of Time to File U.S. Income Tax Return (For U.S. Citizens and Resident Aliens Abroad Who Expect To Qualify for Special Tax Treatment)
- Form 4768 Application for Extension of Time to File a Return and/or Pay U.S. Estate (and Generation-Skipping Transfer) Taxes
- Form 5558 Application for Extension of Time to File Certain Employee Plan Returns
- Form 8809 Application for Extension of Time to File Information Returns
- Form 8868 Application for Extension of Time To File an Exempt Organization Return
- Form 8892 Application for Automatic Extension of Time to File Form 709 and/or Payment of Gift/Generation-Skipping Transfer Tax
- Internal Revenue Service http://www.irs.gov/index.html
- Ohio Department of Taxation http://tax.ohio.gov/