I’ve heard that I can ask the IRS for an extension if I can’t submit my tax return by April 15. Is that right?
Need more time to put together all the paperwork necessary to submit your federal 2005 tax return? If yes, you may still be in luck. The IRS allows individuals to request an extension of time in order to file their 2005 tax return.
Someone interested in an extension may consider submitting Form 4868, which is called the Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. By submitting Form 4868, the person may be able to obtain an automatic six-month extension. The extension is generally four months for someone considered to be “out of the country.”
One important thing to remember is that obtaining an extension of time to file a tax return is not an extension of time to pay. Someone who requests the extension must still make an accurate estimate of their tax for 2005 and send any necessary payment with Form 4868. Someone who cannot pay the full amount due with Form 4868 may still get the extension, although they will owe interest on the unpaid amount.
Form 4868 must be filed before the normal April 15 deadline. Once Form 4868 is filed, the person can file the completed tax return any time during the extension period. Form 4868 used to provide only a four-month extension period, and people seeking additional time were forced to request an additional extension by writing a letter to the IRS or by filing Form 2688 (Application for Additional Extension of Time to File). The IRS recently altered its policy to allow Form 4868 to grant up to a six-month extension.
Keep in mind that whether an extension is advisable is an individual decision that is unique to each person. While it’s good to know that the option exists, you should talk with an attorney or accountant to determine how the extension may affect your situation.
This article appears in April 7 • 2006.