Industry News - Regulatory Updates
March 22, 2012
Applying for an extension on filing tax returns
The Internal Revenue Service allows taxpayers who cannot be ready to file by the April 17 deadline to apply for an extension by filling out Form 4868 or by e-filing, directly or with the assistance of a tax preparation professional. Free filing options available to taxpayers can also be used by those seeking an extension.
Extensions are granted automatically, although filing may have special requirements for people who are outside the country. Day traders who have incorporated or formed a separate business entity may need to file differently using Forms 7004 or 1138, depending on the circumstances. Separate forms also exist for particular cases, such as returns for exempt organizations.
This year, extensions will delay payment until October 15, but interest may accrue during that period. As a result, it is unwise to apply for one unless it is truly necessary. The IRS recommends filing on time and paying as much as possible by the due date. Taxpayers can contact the agency to discuss their options, and may find that a payment agreement or other choice is better suited to their circumstances than an extension.
The exceptions may include people who are still waiting for information they need in order to complete their returns and those with taxes more complicated than usual. While the IRS approves extensions automatically, some may be denied if the estimate is particularly inaccurate. A flawed estimate that is reasonable based on current information may lead to additional charges later.
