Why You Need IRS Form 4868 Right Now

By Dan Caplinger Markets Fool.com

Tax returns are due in just days, and millions of taxpayers are still putting the finishing touches on their tax returns. If you're getting close to the wire and still aren't sure whether you're going to get your returns done in time, then there's just one form you ought to focus on right now: IRS Form 4868. Unlike most tax forms, Form 4868 couldn't be simpler, and it gives you exactly what you need: six extra months to get your tax return completed and filed. But even though getting an extension on your taxes is easy, there are still some things you need to be aware of to avoid nasty surprises.

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What IRS Form 4868 does

Form 4868 is titled "Application for Automatic Extension of Time to File U.S. Individual Income Tax Return," and that's exactly what it does. Simply by filing the form, most taxpayers can get an automatic six-month extension on the due date for their tax return. That puts the final get-it-done date in mid-October.

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The form is about a third of a page long, and to complete it, you just need to provide personal information, an estimate of your total taxes due, the amount you've already paid through payroll withholding and estimated tax payments, and the balance that you're paying with the extension request. You don't have to give a reason, and the vast majority of automatic extension requests are granted.

How to get your extension

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There are several ways you can file for the extension. Completing a paper Form 4868 and sending it to the IRS is one option, but you can also electronically file Form 4868. Many companies offer free e-filing of Form 4868 through the IRS Free File program, and even if your income is high enough not to qualify for complete tax preparation services through the program, you can still find some preparers who will let you e-file an extension request at no charge.

The IRS also says that you can get an extension even without filing Form 4868 if you make a payment using the IRS electronic payment options. An extension is automatically processed when you pay all or part of your estimated income tax electronically. However, having a copy of an actually filed 4868 is insurance against any misunderstanding.

Things to watch out for

Even though filing for an extension is easy, there are a couple of things you have to remember. First, you have to request your extension on time, on or before the April 18 due date for filing your tax return. Late-filed requests for extensions are not automatic and are much more likely to be rejected.

In addition, an extension to file your return is not the same as an extension to pay the tax you owe. This should be clear from the fact that Form 4868 asks how much tax you owe and how much you're paying with the extension request. Fail to pay in a timely manner by April 18 and you'll start the clock on interest and penalties.

Finally, those who live outside the country already get an extra two months to file returns without requesting an extension. However, if you expect to need more time beyond June 15, then filing Form 4868 can give you equal treatment and provide you with the same mid-October extended deadline as other taxpayers.

If you're finding the tax filing deadline has crept up on you and that you won't be ready to file by April 18, getting an extension by using Form 4868 is your best move. That way, you can get the time you need to get your taxes done right and avoid any unnecessary errors from having tried to work too quickly to meet the deadline.

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