How To Request A Tax Filing Extension: T-Day Is Nearing

Well, it’s that dreaded time of year again: tax season. With ‘T-Day’ just over a week away, I thought now might be a good time to go over filing for an extension on your tax returns. Everyone is eligible for a six-month extension…. IF you ask for it. For those of you who have particularly complex taxes, this allows you to buy yourself a bit of extra time to gather all of the paperwork and get it all done.

In order to request an extension to your tax filing deadline, you will need to fill out IRS Form 4868. Many online tax preparation software programs or tax filing systems also allow for electronic submission of this form. Be sure that you date and postmark your request by April 15th! Otherwise you can be charged heft late penalties.

One thing to note: you still have to pay taxes due by T-Day! While you can get an extension for the paperwork, you are still required to estimate the amount of tax you will owe and submit that with Form 4868. If you don’t submit at least 90% of your true tax liability, the underpayment penalties are also pretty steep (7% interest and up to 25% in penalties), so be careful when doing this.

You should receive confirmation and approval for your extension quickly. When you do get around to finishing up the paperwork and filing everything any difference in true amount due will be billed or refunded to you. You claim credit for the funds you sent in when you filed for the extension on the appropriate line of your forms:

» Form 1040, line 69
» Form 1040A, line 42
» Form 1040EZ, line 9
» Form 1040NR, line 63
» Form 1040NR-EZ, line 21

Obviously, if you are owed a refund you want to file as soon as you can. Getting that extra money into your pocket is always helpful! Those filing for an extension will have their tax rebate check delayed, so keep this in mind.

There are exceptions if you are living outside of the United States, serving in the military or a combat zone, or will be out of the country when your deadline expires. Be sure to research all that applies to you!

Changes to the 2008 Tax Year Deductions

The 2008 tax year (with a due date of April 15, 2009) saw a few changes to tax codes, deductions, and exemptions. You’ll want to be sure you are carefully reviewing your options to make sure you are getting the most back that you can! Here are just a few of the changes:

• As you saw during IRA Awareness Week, you can contribute $1,000 more to your Individual Retirement Account than last year. The maximum contribution for those under 50 is $5,000, and $6,000 for those 50 and older.

• Children’s investment income, or the ‘kiddy’ tax, applies to certain amounts of investment income from investments held in a child’s name at the parents’ marginal tax rate. Now, children under 19 and full-time students up to age 24 can be taxed at their parents’ marginal tax rate on their investment income over $1,800.

• Each year, the standard deduction and exemption amount are adjusted for inflation. The standard deduction has been increased $200 to $10,900 for married couples filing jointly; $5,450 for married couples filing separately and singles; and $8,000 for household heads. Personal and dependency exemptions increased to $3,500.

• Green tax credits are available up to $500 for home energy-saving improvements. You can get a credit of 30 percent, up to $2,000, for equipment that is solar or wind powered.

The IRS Website has full details on exemptions, deductions, and requirements for your tax return at http://www.irs.gov.