Thursday, April 14, 2011

Filing for an extension on federal, state and local income taxes (Updated 2017)

If you have not filed your federal or state income tax returns or paid your taxes, you can file an extension on or before Tuesday, April 18, 2017.  The standard extension is 6 months - so you then have until October 15th to get your final return filed.  You still must pay what you estimate you owe in taxes.  Your filing for a federal extension automatically qualifies you for an extension for your Pennsylvania income taxes as well.  As to local income taxes - your mileage may vary - call the local tax assessor and ask the question about what you need to do to apply for an extension with them as well.  

Here is the lowdown from the IRS on the federal extension:

Requesting an extension (Federal)

Taxpayers who cannot complete their return and file by April 18, 2017 may request an extension of time to file.  There are several ways to file Form 4868 for an extension.
File electronically:
Or, download a paper version of Form 4868  and file by mail. 
Reminder, an extension of time to file is not an extension of time to pay. 

And here is the parallel information for Pennsylvania:

How do I get an extension to file my PA Income Tax Return?

If you need more time to prepare your taxes than the deadline permits, you may file for an extension of time by completing an "Application for Extension of Time to File" REV-276.
Here is the link to the form:
http://www.revenue.state.pa.us/portal/server.pt/document/628984/rev-276_pdf
If you have an approved extension from the Internal Revenue Service (IRS), you do not have to file for a state extension unless you want an extension greater than the extension granted by the IRS.

However, please remember that an extension to file is not an extension to pay. If you feel you will owe tax, you should send a payment for the amount of tax you expect to owe. Make sure you record your Social Security Number on the check with the notation that you are making an "extension payment" for the tax year.

Mail your extension payment and/or application REV-276 by April 18, 2017 to:
PA Department of Revenue
Bureau of Individual Taxes
PO Box 280504
Harrisburg, PA 17128-0504
After filing for the necessary extensions, diary ahead for that October deadline so that you remember that you have not filed your return.  Give yourself plenty of advance notice.  Now that the pressure is off, don't put yourself back in that position in October!

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Friday, April 1, 2011

Tax Day coming up: extensions to file and pay

Tax Day - the date your federal income taxes are due, is the latest it can be this year:  Monday, April 18th.  Normally it falls on April 15th.  When the 15th is a weekend day, then the deadline is pushed off to the next business day - the following Monday.  This year the 15th is on a Friday - and so normally that would be the deadline.  However, the city of Washington DC has a legal holiday called Emancipation Day - which commemorates the anniversary of the the signing by Abe Lincoln of the Compensated Emancipation Act on April 16, 1862.  That Act eliminated slavery in Washington DC, and provided compensation for slave owners.  


Typically the holiday is "observed" on April 16th.  However, when the holiday falls on a weekend, it is "observed" on either the previous Friday or the following Monday.  Presumably, it is "observed" on a week day so that the legal holiday falls on that week day and permits the local government offices to take the paid holiday that accompanies it.  And this year, our of respect for that DC holiday, Tax Day, which would otherwise fall on the date on which Emancipation Day is observed in Washington DC this year, is instead pushed back to the following Monday, April 18th.  


If you are a card carrying member of the Procrastinator's Club, then you already know that you can routinely file for an extension to the deadline to file your return - and that will postpone the filing obligation till October 17, 2011. However, the extension does not waive the obligation to pay a pretty accurate estimate of what you may owe in taxes by the April deadline.  In other words, you need to rough out what you may owe, and pay that amount with your extension request.  You can firm up that figure when you file your final return on or before the October deadline.  For more information on seeking an extension, go to IRS Form 4868: Application for Automatic Extension of Time to File U.S. Individual Income Tax Return.  This is the very simple one page form with instructions.

What if you need more time to pay your taxes?  You can ask as well for an extension of the time to pay, or you can enter into an installment payment plan.  You may be charged interest and penalties, but the IRS offers options that can avoid or minimize those charges as well.  If you don't use the IRS's methods, and don't file your return or pay your taxes on time, then you will be charged various penalties and interest.  So it is definitely worthwhile to look into what programs the IRS offers.  Here is there current IRS Tax Tip, with helpful links, on taking more time this year to pay your taxes:

"Here are the top 10 things the IRS wants you to know if you need more time to pay your taxes.
  1. Taxpayers who are unable to pay all taxes due are encouraged to pay as much as possible. By paying as much as possible now, the amount of interest and penalties owed will be less.
  2. Based on the circumstances, a taxpayer could qualify for an extension of time to pay, an installment agreement, temporary delay or an Offer in Compromise.
  3. If you cannot pay the full amount, taxpayers should immediately call the number or write to the address on the bill they receive.
  4. You may want to consider financing the full payment of your tax liability through a loan. The interest rate and fees charged by a bank or credit card company are usually lower than interest and penalties imposed by the Internal Revenue Code.
  5. If you cannot pay in full immediately, you may qualify for a short amount of additional time, up to 120 days, to pay in full. No fee is charged for this type of payment arrangement and this option may minimize the amount of penalties and interest you incur.
  6. You may also want to consider an installment agreement. This arrangement allows you to make monthly payments after a one-time fee of $105 is paid. If you choose to pay through a Direct Debit from your bank account, the fee is reduced to $52. Lower-income taxpayers may qualify for a reduced fee of $43.
  7. To apply for an installment agreement you can use the Online Payment Agreement application available on the IRS website; file a Form 9465, Installment Agreement Request; or call the IRS at the telephone number shown on your bill.
  8. In some cases, a taxpayer may qualify for an offer in compromise, an agreement between the taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed. Generally, an offer will not be accepted if the IRS believes that the liability can be paid in full as a lump sum or through a payment agreement.
  9. Even if you set up an installment agreement, the IRS may still file a Notice of Federal Tax Lien to secure the government’s interest until you make the final payment.
  10. It is important to respond to an IRS notice. If you do not pay your tax liability in full or make an alternative payment arrangement, the IRS is entitled to take collection action.
More information on the collection process is available at http://www.irs.gov.
Links:
And here is one more tax related link, to my friend Carla Howell's song about the subject:  "How Could I Live Without Filing Taxes":  http://www.centerforsmallgovernment.com/feature/how-could-i-live-without-filing-taxes/


Happy Tax Day!
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