Any time you can't complete your federal income tax return by the mid-April deadline you need to get an extension. You can do this by filing a Form 4868, either by mail or electronically, but you must do it before the tax deadline and you must estimate any amount you owe and pay that before the deadline. You'll owe interest if you don't pay by the deadline and a penalty if you pay less than 90 percent of your tax. Form 4868 gets you more time to file the paperwork, not more time to pay.
Fill out a Form 4868 with your name and Social Security number and those of your spouse if it is a joint return. File the basic document if you will be due a refund or estimate how much you will owe and pay that amount by check or money order or with a credit card if you file the form electronically.
Estimate your tax liability based on your previous year's return if you have not had major changes in your income, exemptions or deductions. Use your current-year W-2 for wages or salary or use your 1099s for other income, such as interest, dividends or freelance work to estimate income if things have changed. Total your projected income and subtract exemptions, for you and dependents, and your deductions to figure your taxable income, then use a current year tax table to find your tax liability. Use the standard deductions or itemize them, depending on how to plan to file your return.
Enter your names, address and Social Security numbers on lines 1, 2 and 3 on part 1 of Form 4868. Put your estimated tax liability on line 4 -- that's what the tax table shows for your taxable income bracket -- for instance $11,006 on $75,000 taxable income. List tax withheld or estimated payments you made on line 5 -- for example $10,000 in withholding and $500 you paid as estimated tax.
Subtract line 5 from line 4 to get your balance due -- in this example $506. Pay that amount with your Form 4868. You will have until Oct. 15 to complete your full 1040 return and make any adjustments in the amount owed. You will get a refund if the amount you estimated is more than your final 1040 taxable amount; you'll make another payment and may be subject to interest if you underpaid.
- It is best to overestimate your tax liability on Form 4868 to avoid interest or possible penalties.
- Refer to the IRS filing instructions for the amount for each personal exemption and the standard deduction amounts for individuals, joint returns or head of household. Follow instructons for Schedule A to itemize deductions.
- You must file your regular Form 1040 return within six months of your extension, normally Oct. 15 for an April 15 deadline.
Bob Haring has been a news writer and editor for more than 50 years, mostly with the Associated Press and then as executive editor of the Tulsa, Okla. "World." Since retiring he has written freelance stories and a weekly computer security column. Haring holds a Bachelor of Journalism from the University of Missouri.