Tax Due Date too Early? File an Extension

The last day to file income tax returns for 2006 is Tuesday, April 17, 2007. So if you cannot file your tax forms by then you better consider a 2006 tax extension.

The clock is ticking quickly and tax day will be upon us soon. Currently, you may find yourself short of time to file a complete and accurate return. If this is you, simply apply for an extension by the due date of your return, April 16, 2007. Now this is important: Go to irs.gov and print out Form 4868 and send this extension request to the Internal Revenue Service office with which you file your return. You get an automatic 6-month extension if you file the correct paperwork on time, and if you give a ballpark estimate of what you probably will owe–you will owe interest on any tax not paid by April 16, 2007. Paying tax by credit card is an option–SEE FORM 4868 for all the details. If the tax paid with Form 4868, plus withholdings and estimated tax payments for 2006, is less than 90% of the total amount due, you will be subject to a late-payment penalty (usually one-half of 1% of the unpaid tax per month)—unless you can show reasonable cause. Remember: Do not mess with the IRS! They have the government behind them and that is not something you want to get yourself involved in.

If you know October 15, 2007 still will not be enough time to come up with the necessary tax payment you need Form 9465 to request an installment arrangement. Now this will not be easy nor pretty.

If you owe under $10,000 you have a chance.

• Prove you you will not have the means to pay the tax
• Prove that the last 5 years you filed and paid your taxes
• Plus not installment agreements in that time
• If married, you both will need to meet this criteria
• Pay tax off within 3 years
• Late payment penalty interest charge of 0.25% per month will apply

Written by Nagel on March 13th, 2007 with no comments.
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