William Penn Life, 2003 (38. évfolyam, 1-12. szám)
2003-04-01 / 4. szám
_____________________I MoneywiSe _____ Pay now, file later What you need to know before you apply to the IRS for an extension from www.hrblock.com Tax procrastinators beware: you are not alone. Last year nearly 10 million taxpayers asked for an automatic four-month extension in April and more than 2.5 million taxpayers requested an additional two-month extension to file until Oct. 15. You may obtain an automatic fourmonth extension to Aug. 15 to file by submitting Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. The form and instructions are available at the IRS website: www.irs.gov/formspubs/ HstsO„id=97796,OO.html. There are several options for filing an extension and/or paying a balance due. Mail. Mail the Form 4868 and your check for the estimated balance due if applicable. By including a check for the balance due, you avoid additional penalties and interest from the IRS. Be sure to check Form 4868 instructions for the correct mailing address. Telephone. From March 1 through April 15, you can e-file Form 4868 by telephone. You may pay a balance due by electronic funds transfer from your checking or savings account or you may wish to mail a check. If mailing a check, make sure it is postmarked by April 15. Tax software. You may e-file utilizing a purchased tax software program or by going through a tax professional. The payment options are the same as for telephone e-filing. With all e-filing options, you will Money Links For more information on how to file for an extension on your income tax return, log onto the website of H & R Block at: O www.hrblock.com indicating that your return was received. Be sure to write this number down and keep it in a safe place. Full or partial credit card payment. You may pay all or part of a balance due when you request an extension of time to file. The credit card payment options are listed on Form 4868. Please note that these services charge a nondeductible convenience fee. Need more time? If you are still not ready to file by Aug. 15, you may request an additional two-month extension to Oct. 15. To do so, file Form 2688, Application for Additional Extension of Time to File U.S. Individual Income Tax Return. The second extension is not automatic, however. The IRS will approve or disapprove the extension, depending on the reason stated on Form 2688. Do not assume the extension has been approved unless you receive notice of approval in writing from the IRS. If it's clear to the IRS that you really have no important reason for delaying your filing a second time, the IRS will deny your request. Those reasons that might pass muster with the IRS for additional time to file, however, include hardship (such as illness), a lifestyle change (moving to another city or death of a spouse) or travel outside the U.S. by you or your spouse if you file jointly. Why file an extension at all? Without a valid extension, a latefiled return is subject to a five percent per month penalty on any unpaid balance. The maximum penalty is 25 percent when combined with the late payment penalty. Late filing penalties are generally abated for: • Death or serious illness of a taxpayer of family member. • Unavoidable absence on the filing date. • Destruction of a residence or business records. Even if your late filing is not due to one of these reasons, it never hurts to ask the IRS to abate the penalty; the worse they can say is "no." Filing versus paying An extension of time to file is not an extension of time to pay. When you file your extension request, you must estimate any balance due and you should generally pay in as much of the balance due as you can. A late payment penalty is charged of .5 percent per month on any unpaid balance. The maximum penalty is 25 percent, when combined with any late filing penalty. However, you may qualify for an extension of time to pay. To qualify, you must be able to establish to the satisfaction of the IRS that your assets, liabilities, income, and expenses are such that immediate payment would cause "severe loss and undue hardship." To request a payment extension, file Form 1127, Application for Extension of Time for Payment of Tax. If a payment extension is granted, you will avoid late payment penalties, but you will still have to pay interest on the balance due. Copyright 2000-2003 H & R Block. All Rights Reserved. 4 William Penn Life, April 2003
