Thursday, August 7, 2008

I don't have any money -- EXTENSION!!!!

Every day I come across taxpayers who have not filed their income tax returns for one simple reason.

"I didn't have the money to pay my taxes."

Most of these taxpayers tell me it's OK because I filed for an extension. However, no payments were made when they filed for this extension. They all say, "If I had money to pay the taxes...I wouldn't have filed for an extension." But filing for an extension is NOT an extension to pay your is an extension to file your return. You are still required to mail in an estimated tax payment with your request for extension.

You now, however, have three ways to file for an extension. You can file online with Form 4868 by using a credit card to pay an estimated tax payment. You can file through the mail using Form 4868 and mailing your extension with a check for your estimated taxes. Finally, you can simply pay all or part of your estimated tax payment though an outside service provider provided on Form 4868. There is a separate process you must go through if you are serving in the military in a combat zone or hazardous area.

Just remember one must pay your taxes when you file for an extension or it is like you never filed them at all. The IRS wants the money due to them. Paying an estimated amount of taxes with an extension will allow you more time without further penalties.

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