With Tax Day less than a week away, I thought I’d take a bit of time to talk about how to request an income tax filing extension. In case you’re now aware, everyone is entitled to an automatic, six month filing extension — all you have to do is ask.
In order to request your extension, simply file IRS Form 4868. You can also file for an extension electronically using your favorite tax prep software, or through your tax preparer. The deadline for such requests is April 15th, 2008.
That’s the good news. The bad news is that you still have to estimate how much you will owe and submit that payment along with you extension request. This is an important point because, if you fail to pay at least 90% of your total tax bill (through withholding, estimated quarterly payments, and you final estimated payment that goes in with Form 4868), you’re underpayment will be subject to 7% interest and up to 25% in penalties. Ouch!
If you choose to file an extension, then you can claim credit for your estimated payment on the appropriate line of your tax return:
Â» Form 1040, line 69
Â» Form 1040A, line 42
Â» Form 1040EZ, line 9
Â» Form 1040NR, line 63
Â» Form 1040NR-EZ, line 21
Of course, if you request an extension, your tax rebate check will be delayed. If you don’t qualify for the tax rebate, then this is a non-issue. But if you do qualify, then you might to file on time so you can stick to the regular tax rebate payment schedule.
Note: The rules may be different if you live overseas or are currently serving in a combat zone.