Tax Extensions How To Apply

If you are not ready with your tax returns yet and the dreadful tax day aka April 15 is nearing, what you mostly need is a tax extension. No matter what might be the reason for not filing, IRS allows for an extension of 6 months on filing tax returns and this provision is known as tax extension. The deadline is postponed to October 15 and this way you will have more time to make up for the mistakes such as having inadequate documents or lack of preparation. Not filing tax returns and failing to file an extension too can lead to hefty penalties, starting from 5% of the unpaid taxes to a maximum of 25%. Apart from failure-to-pay penalty, if adequate finances are a major problem in your case and provided you fail to pay off the dues within April 15, an additional failure-to-pay penalty is added to the latter. Filing for a tax extension not only provides you with extra time but also helps to avoid penalties. The procedure to apply for an extension is pretty simple, yet it provides you with an opportunity to file a good tax return and have a good tax history. Here’s more on how to apply for a tax extension.

- The last date to apply for a tax extension is April 15 and for an easy and quick filing, people prefer e-filing over the traditional ways of doing it on paper forms.

- You can either request the extension forms from IRS by mail or download for free on its website, the second option being more practical and feasible. You would need form 4868 for individual purposes and form 7004 for business purposes.

- Once you have the access to the form, all you would need to apply for a tax extension is your name, contact details and your social security number. Make sure to make no entry errors or provide any false information and you can be rest assured that your application will be approved!

- To further confirm the status of your application, you can track the same through internet. You will also receive a confirmation mail from the IRS on the approval so that you can prepare to file your tax return in peace. Note that this provision wouldn’t be available if you are filing offline.

- In addition, your application wouldn’t be lost as it would happen in the case of mail. There are many e-filing provider websites who will teach you how to apply for a tax extension, provide you with the forms for free, advice on all features of extension and help you complete filing within 5 to 6 minutes!

As told before, it is really simple to understand how to apply for a tax extension. For more information, you can contact the IRS website or take the help of an e-file provider website to help you understand how to apply for a tax extension and also managing your application for you.

FileLater.com is an authorized e-file provider website helping the taxpayers of the US, both individuals and businesses to know how to apply for a tax extension by providing all the forms, resources and advice. For more on filing a tax extension, visit About.com.

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Use a Tax Organizer to Estimate Quarterly Taxes (1)

For many taxpayers, a tax organizer is a critical component of keeping Uncle Sam happy. A reputable tax service provider works with you to customize an organizer to perfectly suit your needs and goals. Estimated taxes — also known as quarterly taxes — are a good idea for many and a requirement for some. If you do not have enough taxable income withheld throughout the year from an employer, you may need to send quarterly payments to the IRS. If you do not have enough withheld (or any at all) and you do not pay enough estimated/quarterly taxes throughout 2016, the IRS may penalize you next April.

How can you figure out if you are withholding enough? Your CPA can tell you. It depends on many factors, including your tax bracket. You may also need to pay an additional amount for state taxes (rates vary by state, with some boasting zero income tax) and/or county taxes.

No Such Thing as a Free �Ц

While income is generally thought of as revenue from working, owning your own business, etc., taxes must also be paid on interest, rent, prizes, dividends, alimony and more. For business owners, your estimated tax payment can cover both income and self-employment taxes. Different taxpayers have to use different forms to file their estimated taxes, which are due in April, June, September and January. Sole proprietors, self-employed people and S corporation shareholders must use Form 1040-ES, Estimated Tax for Individuals. Corporations must use Form 1120-W, Estimated Tax for Corporations. It can be hard to tell whether you will get dinged with an IRS penalty for not paying estimated taxes (or enough in estimated taxes), but a tax professional can tell you that if you anticipate owing more than $1,000 in taxes each year, it is best to pay estimated taxes. For corporations, that figure drops down to $500. Farmers and fishermen fall under a different category, which is outlined in IRS Publication 505.

Paying it Forward

You can best estimate how much you should pay in quarterly taxes in two ways: Ask your CPA, or use the Form 1040-ES worksheet. A lot of guessing is involved, but you can use last year’s income information as a foundation (if you have similar income year after year). However, if you’re off, do not worry. If you pay too much, you will get a refund, and if you do not pay quite enough, you can pay the remaining balance in April. Bear in mind that it is important to post your estimated payments on time. The easiest solution is using the Electronic Federal Tax Payment System, or mail in your payment via snail mail. Via the online system, you can make payments as often as you wish — daily, weekly, monthly, etc. All that matters is that by the time your quarterly payment is due, the full amount has been sent. Alternatively, you can also pay via electronic check over the phone. Some taxpayers have been assessed a penalty for failing to make payments on time, even if they ultimately paid appropriate quarterly taxes, so keep an eye on the calendar. Your strongest secret weapon is your CPA. With tax laws, benefits and credits constantly changing, you deserve an expert in your corner. Using a tax organizer is the best way to keep track of your income and expenses and will make your CPA’s job easier, so you won’t have any surprises when tax day rolls around next year.

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