Tax time is around the corner; the deadline for filing 2011 tax returns is on April 17th 2012. It is important to file on time; otherwise, you are subject to late penalties. If you owe income taxes, it is vital to pay the IRS on time avoiding added interest and penalties. If you cannot file your taxes on time, you must file an extension.
Filing an IRS extension is easy, and free other than the cost of a stamp. You will need to get an IRS Form 4868, which you can print out from IRS web site. This will be a (pdf) file, make sure you have the right address as well. It should come with the form if not look it up on the IRS site. Fill in your name and Social Security Number and mail it to the IRS. You can file online it is easy, however; some companies charge a small fee for filing an extension.
If you owe estimated taxes you will have to fill out lines 4 to 6 of Form 4868 and report your tax liability, and if you made any kind of partial payment. It is essential to know an estimated amount you owe the IRS and send it in with your extension. If you do not owe any money, leave those lines blank. Line 7 specifies the amount you are paying, if you are not sending a payment make sure you put zero on line 7. Remember to mail before April 17th 2012.
If you are expecting a refund, the IRS expects you to file an extension, but there are no extra fees, interest charges, or penalties due on your tax refund.
There are benefits to getting six extra months to file your return; it will give you more time to gather important document. An extension also helps reduce late penalties the IRS charges five percent a month on the amount you owe, filing an extension and then filing on time by October 18th the latest avoids all these fees. If you are self-employed, an extension benefits you by giving you the added time needed to organize all your forms and receipts.