Tax extension information from Donahue & Associates

Taxpayers may file IRS Form 4868 with the IRS on or before April 15 to extend the time to file their income tax return until October 15. Filing this form extends the time to file the return, not the time to pay taxes due for that year. If you believe you will owe taxes with the return, you should send an estimate of the tax amount due with the extension. There are no penalties involved with filing an extension, and there is no proof that filing after April 15 increases your risk of audit. If after filing for an extension you still owe income tax with your return, you will be charged interest from April 15 until the tax is paid. In addition, if you have underpaid the tax by more than 10%, you could be assessed a late payment penalty equal to ½ of 1% of the underpaid amount.

In many cases it may be advisable to file for an extension of time. For instance, many taxpayers may not have all their information needed to file the return. This often happens if you are a partner in a partnership or a shareholder in an S corporation. Extending the time to file your return can also extend the time for making certain elections with your return. Extending your return can also extend the time to fund certain retirement plans for the self-employed. All IRA's must still be funded by April 15.

Please contact us if you want to know more about extensions or would like for us to file one on your behalf. To learn more about extensions, please visit the Extension Forms page on the IRS website.