How to File a Tax Extension

April 14, 2010

Filing for a tax extension can be a good idea if the tax deadline is here and you haven’t had time to gather together all your tax forms and fill out your 1040.

I’ve filed a tax extension before; it’s easy to do and makes sense if you don’t have all the information you need to completely fill out your tax return.  Keep in mind that although a tax extension lets you delay filing your tax return you still have to pay the money you owe the IRS by April 15th or you could face fees and interest.

Estimating Your Taxes

If you tax situation is similar to the previous year you could use your tax bill from last tax year as a starting point to estimate your taxes.  If it were me, I’d estimate high because I’d rather overpay and get some of the money back than risk paying too little and ending up owing interest on my unpaid taxes.

Typically you don’t want to overpay your taxes throughout the year because you’re giving the government an interest free loan for almost 12 months but in this case the time period between when you file your extension and you actually send in your tax return is likely much shorter.

If you use Form 4868 that we’ll cover in a second, the extension does give you another 6 months to file so if you do overpay, don’t wait until October 15th to file your taxes.

Tax Estimate Calculator

Another way of estimating your taxes due is to use a tax estimate calculator like TaxCaster from TurboTax. Tools like this ask you to fill in information about your income, tax deductions & credits, and any tax payments.  Then they come up with an estimated amount of federal taxes due.

Form 4868

In order to file a tax extension for your personal tax return you fill out form 4868, an Application for Automatic Extension of Time to File U.S. Income Tax Return.

As I mentioned earlier, I’ve filed for an tax extension before, there’s not much to it.  After you fill out form 4868 you can either mail it in or you can e-file.  This gives you a 6 month extension, which means you need to have your tax return filed by October 15th.  Resist the urge to put off filing until next October because it will be here before you know it and you don’t want to find yourself scrambling up against another tax deadline.

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Ben

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Ben
Ben Edwards, the founder of Money Smart Life, saved up enough to buy a Nintendo back when he was 12 years old. When he used the money to buy shares of Wal-Mart stock instead, he knew he wasn't like the other kids... His addiction to personal finance has paid off for his family and now he's helping you to afford the life that you want. Check him out on the web at Google Plus, Twitter and Facebook.

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3 Responses to How to File a Tax Extension

  • Claudia Davis

    I truly never understood te idea of the tax extension filing. If I could even begin to do my taxes myself and estimate what I owe, I might as well just file. This ear I waited until the last minute but its the first time I am filing on my own without a CPA. I made no money last year but had to take out money form my 401K so I owe taxes because I didnt ask them to withold them. I do have a medical exception and its so confusing to figure out. I want to file the extension just for that alone but that wouldnt allow me the extension in and of itself.

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