Tax Tips and Tidbits

Tax Tips and Tidbits

• Steven R. Anderson E.A.,
• Master Tax Advisor, H&R Block, Pawling, NY

With the filing deadline of April 18, 2016 rapidly approaching, it’s time to turn our attention the topic of extensions. This week I hope to provide information and also dispel some myths regarding extensions.

1. The first myth I would like to dispel is the one that says that if you are getting a refund, you don’t need to file an extension. While it is true that the IRS only penalizes late filers on the balance due amount, a refund return still has a due date of April 18 (this year).  So why extend if there are no consequences?  You never know when you might need to negotiate with the IRS over a dispute, or a request for penalty abatement, or an installment plan, or any of a dozen other things.  Often, being able to include a phrase that you have always filed and paid your return on time is the difference between a successful outcome and a negative one.  So take a minute and drop that extension in the mail!
2. The second myth to dispel is that you can extend the time to pay a balance due. The extension is an extension to file the return, not to pay the balance due.  When you file an extension, you are expected to estimate your tax liability and pay any expected balance due with the extension.  The IRS can, and will, void an extension and charge interest and penalties back to April 18^th if you owe a large balance and do not pay with the extension.  Here is the text directly form the form 4868 instructions: Although you are not required to make a payment of the tax you estimate as due, Form 4868 does not extend the time to pay taxes. If you do not pay the amount due by the regular due date, you will owe interest. You may also be charged penalties.

Ok, so now that the myths are busted, here’s the lowdown on extensions.

1. You are applying for an automatic six month extension to file your return. The due date is extended to October 17, 2016.  (October 15^th falls on a Saturday this year.)
2. To file for a federal extension, fill out form 4868. It is a simple form where you list the taxpayer and spouse’s name, address and social security numbers, your estimated tax liability and your estimated tax payments.  Form 4868 is mailed to the IRS service center where you file your return:
   1. If you are not making a payment: Internal Revenue Service, Kansas City, MO 64999-0045
   2. If you are making a payment: Internal Revenue Service, PO Box 37009, Hartford, CT 06176-7009.
   3. Form 4868 can also be e-filed using most tax software.
3. New York State will also grant an automatic six month extension (again, an extension to file, not to pay), but all NYS extensions must be filed electronically using the New York State Department of Tax Website. The web address is tax.ny.gov   Type “extension” in the search box.
4. For those taxpayers who need to file an extension for the State of Connecticut:
   1. If you do not expect to owe any additional tax and you file a federal extension, you do not need to do anything, Connecticut will grant you an automatic six month extension.
   2. If you do expect to owe, then you must pay the expected amount with the extension. Use form CT-1040EXT.  Either file it online or mail a paper copy to: Department of Revenue Services, PO Box 2977, Hartford, CT  06104-2977.

One final note, checks to the IRS should be made out to “United States Treasury”.  Be sure to put 2015 form 4868 in the memo field along with the last 4 digits of your social security number.

H & R Block · 158 RT 22 Ste C2 (Hannaford Plaza), Pawling, NY 12564

Tel: (845) 855-1241 · e-Mail: standerson@hrblock.com