It is the 15th of April, and for most people, income tax returns and payments are due today. If you’re not going to be done, it is better to file for a tax extension than to rush through and make mistakes. (I know this from experience!) You will still have to pay any amount due, or at least as close as you can estimate, in order to avoid interest and penalties.
Step One: Estimate Your Taxes
To do this, you’ll need to fill out as much of your tax return as you can. This is how you know whether you will owe additional money with your extension request.
If you are one of my many readers who has emailed looking for replacement tax documents, and you are not able to access your MyPay account, you will have to estimate to the best of your ability. If you have an old Leave and Earnings Statement, you should be able to get pretty close with some basic math. If you are a retiree, you might be able to use the 2011 figures (taking out the extra payment) and increasing it for the 3.6% Cost of Living Adjustment.
Step Two: File For An Extension
Good news about asking for an extension: it is automatic if you ask. As in, “The IRS will say yes if you file for an extension.”
But how do you file for an extension? You can file online, or you can file by mail. At this late date, I’d prefer to have the assurance of an electronic receipt.
I was going to provide step-by-step instructions on how to file for an extension using Military One Source‘s H&R Block At Home program, but I can not get into my Military One Source account. You may have more success than I did, so that is the first place I would try. However, many other tax preparation software programs will allow you to file for an extension without paying for it.
Step Three: Make A Payment
If you owe a balance when you finally complete your tax return, you will owe interest on the amount you owe. In order to prevent this, you should make a payment today. Guesstimate how much you’ll owe, and pay that amount or even a little more. You can pay online or on the telephone, using a credit card, a debit card, or an electronic funds transfer.
Don’t forget, if you live overseas or are deployed to a tax-exempt combat zone, you are not subject to the 15 April deadline. Overseas taxpayers have until 15 June to file and pay, though they will still be charged interest on amounts owed. The combat zone exclusion allows a longer extension, utilizing a tricky formula that takes 180 days after the last day you are in a combat zone, then gives you additional time for the original filing period that you missed while in a combat zone. Therefore, if your taxes were due on 15 April, and you entered a combat zone on 1 April, you’d get 180 days plus 15 days.
As always, I could write for six days on this topic, but you’d get bored and miss the important stuff. If you need an extension, file today. It’s free, it’s automatic, and it will relieve you of some stress.