Can't file taxes by April 15? You don't have to
The IRS will grant an automatic extension to anyone who asks. But you still have to estimate what you owe and send the money.
This post is by Laura Saunders of The Wall Street Journal.
For taxpayers who can't manage the April 15 deadline, the Internal Revenue Service offers an automatic six-month filing extension. This year the due date is Oct. 15, and taxpayers qualify by filing Form 4868.
Getting an extension is preferable to filing a return with mistakes, says Melissa Labant, a tax specialist with the American Institute of CPAs. "If you have already filed, then you will need to amend the return, which is often more trouble," she says.
Remember that an extension to file isn't an extension to pay. Uncle Sam wants 100% of the total tax by the April due date, or interest and perhaps a late-payment penalty will be due.
Here are common reasons to seek an extension.
Incomplete records, especially for investments or a closely held business. A sore point with many tax preparers is that brokers sometimes issue multiple Form 1099s reporting investment tax information.
Lack of a letter confirming a charitable contribution. The law is clear: Taxpayers must have proper notification from a charity before deducting a donation. "Get that letter before you file," Labant says.
Roth IRA reversal. Taxpayers who converted all or part of a regular IRA to a Roth account have until the October due date the following year to undo the conversion, which is taxable. That might be a good idea if assets in the Roth account have fallen in value since the conversion.
Roth IRA owners who file in April can amend their returns before Oct. 15 to undo last year's conversion, but filing for an extension is often the easier route.
You are traveling, or it is your busy season. Harried tax preparers often file extensions for their own returns.
More from The Wall Street Journal and MSN Money:
VIDEO ON MSN MONEY
We should all file no return as a protest until May. Our tax system is indeed unfair.
"The wealthiest 1 percent of the population earn 19 percent of the income but pay 37 percent of the income tax."
"The top 10 percent pay 68 percent of the tab."
"Meanwhile, the bottom 50 percent—those below the median income level—now earn 13 percent of the income but pay just 3 percent of the taxes. "
So the people that have ridiculed others all through school for actually learning and thus getting better pay because they're actually able to read get a free pass? The bottom half takes home most of their pay. How is this fair? I'm fairly certain that this only seems fair if you're in that group. How can someone who failed to prepare himself for life and thus got a job paying minimum wage, complain that paying a fair percentage to taxes is unfair? Bogus logic.
We need to implement a "Fair Tax" Look it up.
Why is it the government wants our tax money rite away.maybe we should charge them interest waiting for our refunds.
Good information for "new" taxpayers. Everyone had to learn these helpful facts at some point!
The top ten percent use well more than 68% of the resources of this country. Natural resources, human resources, monetory resources, political capital resources, and list goes on. The truth is, money talks; and with Citizens United, money talks more than ever. the wealthy of this country are steering this country right now and they are heading us for a cliff. If you are a Tea Partyer, you are a puppet for the Koch brothers and their rich friends. I know many of you will blow me off and say "That's not true". I dare you to investigate.
So you say we should pay less taxes and shrink government and we will be more free. Well, look around the world at the countries with less government. They are not more free. In fact they are less free and the rich and the powerful are the ones running their lives. Government is an equalizer. It should be an advocate for the little guy. Do have a perfect government? No! That's why we all need to get more involved in politics and voting and do our research. We need to listen to several sides of an issue before we decide.
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