How to File a Free Income Tax Extension

Earlier this week, I finally got around to filing my taxes. In years past, when I filed for myself and my taxes were simpler, I usually waited until the last day. My procrastination has been helped by the availability of online filing. Im thrilled to no longer need to run to the post office late at night on April 15. (This year, the deadline is April 18 due to a holiday in D.C.) In recent years, I could just as easily fill out the paperwork and file in my pajamas without leaving the house, even from the comfort of my own bed with a laptop computer.The last few years, my taxes have grown more complicated, and my accountant now has me in the habit of filing an extension every year. This gives me six extra months to file my paperwork, a task getting increasingly complicated, having moved from an employee with only W-2 income, to a part-time self-employed individual with some income recorded on W-2 forms, some on 1099 forms, and some on no forms, to the sole owner of a business filing with an S-Corp status, with K-1 forms in addition to 1099s and W-2s.Filing a federal extension for your personal taxes is free and simple. Before you get started, find your previous years final tax return (or just your adjusted gross income amount) to verify your identity with the IRS. Make sure you know your other personal information, like Social Security number, and have the information from your W-2 ready.Note: The potential shut-down of the federal government does not affect the due date. You will still need to file your taxes, file for an extension, and more importantly, pay any amount you owe the government, by the regular deadline regardless of the operational state of the government.Step 1. Visit the IRS-sanctioned website, Free File Fillable Forms. Popular tax filing software programs also offer customers the ability to file for an extension. With the IRS-sanctioned website, you can be sure that the service will always be free and you wont be distracted by advertisements for paid products. As of today, its free to file an extension using TurboTax, but there is no guarantee that this method will be free on the day you want to file your extension.Step 2. Create your account. Whether you use the Free File Fillable Forms website (hereafter called FFFF for brevity) or commercial software, youll be required to create an account or login to an existing account. If youre creating a new account, select a user name that will be easy to remember. With FFFF, youll have the opportunity to print your account username and password for reference.Step 3. Select the appropriate form. With FFFF, you have the choice between forms 1040, 1040A, and 1040EZ. Youll need to select the form thats right for you. Form 1040 is the most comprehensive choice, so it is always safe. Depending on your situation, you may not be able to file your taxes using forms 1040A or 1040EZ. Keep in mind that you can still use TurboTax, H&R Block, or any other software to file your taxes before the extended deadline. Even if you file your extension using FFFF, you do not need to return to the IRS-sanctioned website to finalize your tax return. For example, I filed my extension via FFFF myself, but my accountant will be filing my tax return later this year using the method of his choosing. If you plan on finishing your return using some other method, just choose Form 1040 here by clicking the Start 1040 button.Step 4. Complete your personal information. Begin by entering your information at the top of form 1040. Include just your name, address, and Social Security number. At the top right of the screen, there is a button labeled EXT that looks like the image included here. Click that button (on FFFF, not here).Step 5. Estimate your tax liability. Heres the problem with filing for an extension: the IRS wont extend the deadline for paying any tax that you owe. Only the paperwork receives the extension. If you havent paid your full tax bill, you may owe money. You need to estimate how much total tax you owe for last years income. On the form, you will then subtract your total payments, including withholding from your job. To avoid having to pay any penalties, your total payments must be 100% of what you owe. I added up all the payments I made, included withholding from my former day job, the amount of last years overpayment that I applied to this years taxes, and the estimated payments. Since I paid more than my estimated total liability, I did not need to make a payment when filing for the extension.Step 6. Complete the form. Youll need to select a PIN, enter your birthday, and consent to the disclosure statement.Step 7. Pay your tax liability. If youve determined in Step 7 that you need to pay when filing for an extension to avoid a penalty, you have a few options. You can print form 1040V and send a check to the IRS, or you can provide your tax filing service, whether FFFF or a private software company, with your banking information. The IRS will pull the amount you specify from your account electronically using direct debit.Step 8. Submit your extension. Once all the information is complete, the E-File Extension Now button will be available at the top of the page if youre using FFFF. With other software, you will be prompted to file your extension paperwork at the end of the process, though in some cases, you might need to pay a fee. Youll receive responses through email twice. The first will come as soon as you submit your form to notify you that the extension has been submitted to the IRS. Within hours, if there is no problem with the information you entered, you should receive a second response to notify you that the IRS has accepted your extension paperwork and you will now have an extra six months to file your taxes.Dont forget to look into filing an extension for your state taxes as well. In New Jersey, where I live, this is easy. I do not need to file any paperwork in New Jersey for my personal extension. When the IRS grants an extension for federal tax returns, New Jersey will automatically allow the later deadline. If I didnt pay enough state taxes throughout the year, I would need to pay the state when filing for the extension, just like I would need to with the federal tax extension. When I file my paperwork later this year, I can include a copy of my federal extension form and the state will not penalize me for filling late. Different states may operate differently, so always verify what you need to do before the initial tax filing deadline.How to File a Free Income Tax Extension is a post from: Consumerism Commentary Read More ...