How to File an Extension for Your Individual 1040 Tax Return

For those of you who have not yet realized that your annual 1040 tax return is due in the next few days, I thought I would just mention it so you don’t get duped.

If you are not ready to file your tax return, you can file Form 4868 to request what is called an Automatic Extension for Time to File. It’s ‘Automatic’ because you just file the form and you automatically get the extension. You then attach a copy of the Form 4868 with your completed tax return when you do file it.

The Automatic extension will give you 6 more months to file your return. The extension avoids the penalty for not filing on time only.

Warning: This does not give you 6 more months to pay your taxes!

The extension allows you to estimate as best you can at the moment the taxes you owe and pay what you think you owe. If you think your W-2 withholding or Estimated tax payments have covered your tax liability, your estimate would be zero owed and you may even expect a refund. You will not get a refund until you file the completed return and the return shows a refund.

If you fail to pay your tax owed, or estimate incorrectly, you could owe when you file your return. If so, you will also pay some penalties and interest for not paying your taxes by the deadline of April 15th. Again, the extension only keeps you from paying a penalty for not filing on time.

How to:

1. Go to the IRS website at www.IRS.gov

2. Search for Form 4868 (this link should take you there directly:  Form 4868)

3. Print form, fill out form, sign and date the form

4. MAKE A COPY of the extension for you to file with your return later.

5. MAKE ANOTHER COPY for your own file.

6. MAIL the form your tax due date – April 15th.

Information on the U.S. government website for the IRS Internal Revenue Service is free.

They may also link you to video instructions on YouTube.com provided by the IRS.

Additional Cautions:

* Don’t wait 6 months to be almost late again, try to file as quickly as possible. You might forget and be late again.

* Don’t wait to file because you owe money and think you can wait 6 months to pay. The longer you wait to pay, the more interest and possible penalties you may have to pay in addition to the taxes you owe.

* Don’t expect a refund until you actually file your tax return completely. You cannot estimate a refund. Sorry.

* The official site for the U.S. Internal Revenue Service ends with .gov

http://www.IRS.gov

This site has a lot of great information and is very usable.

I hope this is helpful information. Leave a comment if you think I’ve left something out and help others as well.

W-2’s are In the Mail

Employers have until – January 31st each year to issue tax forms W-2 to their employees. Most are mailed via US Postal Service the last week of January. So all of your W-2 forms should be received by you sometime this week. Some employers provide the printed form W-2 in person or include it with the January paycheck, but they are still required to have them ready and on their way to you by today.

If you do not receive your W-2 form, consider the following:

Contact your employer and ask when the Form W-2 was mailed and determine if you might still be waiting on the mail. Keep in mind that first class mail generally takes 2 to 4 days. If a reasonable amount of time has passed, you can ask them to re-send the Form W-2. You should verify that they have the correct mailing address for you if you request a duplicate.

You still are required to file your tax return Form 1040 by April 15th even when you do not receive your Form W-2. You may choose to file an automatic extension for your filing date on Form 4868 to allow you time to get your Form W-2. Another option would be to file Form 4852 – a Substitute Form W-2. This form is provided by the IRS to allow you to estimate your income and withholding taxes that would be reported on your Form W-2. This is just an estimate and you will want to be very accurate in using this method. The most likely accurate information to estimate with will be the year-to-date earnings and withholding reported on your last paycheck for the tax return year.

Forms and instructions are of course on the IRS website at http://www.irs.gov along with useful information created by the IRS to help you on YouTube.com .

Resource Links to IRS forms:

Form 4852 : Substitute Form W-2 Wage and Tax Statement
Form 4868 : Application for Extension of Time to File
Link to IRS topic on YouTube

Tax Season: Step 1 Gathering Records

It’s that time of year when we start seeing commercials for tax refund loans, free tax filing and people on busy intersections dressed like Uncle Sam or Lady Liberty waving us in to the office of tax preparers to file our tax return.  All these reminders begin to push our panic button because we are rarely ready to file our tax return. So here’s a few things to get you started.

1.  Find last year’s tax return:   Last year’s tax return can help you get organized for this year’s tax filing.

2.  Start a list List items on your last return that are the same as this year.

a.   Form W-2 ‘s from your jobs

b.   Form 1099’s from bank accounts for interest and dividends

c.   Misc Form 1099’s for work, rent income, or other miscellaneous income

3.  Contributions for the year can include donations to non profit organizations as well as donations of  clothing, furniture, or other household goods.  You should get a receipt for all donations.

4.  Home Improvements: Some home improvements may provide tax credits for the energy savings they provide.  These items may include a new heater or air conditioner, solar screens, storm doors and windows, and insulation.

5.  Sales Tax is deductible if you itemize your deductions.  A sales tax table is used to calculate this amount based on your income.  However, if you have large purchases for the year such as an automobile, home improvements, or other extraordinary purchases, you may be better off by adding up your sales tax for the year instead of using the table provided amount.

This is at least a start.  It’s still early, so you still have plenty of time to gather your records.