Public Home | Gold Home | Login


By Wayne M. Davies

About . . .
 
Overview
  Member Benefits
  FAQ
  Founder, M. Angier
 
Affiliate Program
  Become a Member
 
Contact Info
  Mission Statement
  Guarantee
  Update Info (subs)
  Site Map
  Tell a Friend
  Your Privacy

 

Resources . . .
 
Articles
  Courses
  Customer Service
  Gold Member Home
  For Publishers
  Forums
  Free Stuff
  Helpful Links
  Premier Partners
  Product Catalog
  Quotes Library
 
Reports
  Sample Articles
  Sizzle Sites
  SuccessMark Cards
  Success Shop
  Top Ten Lists
  Tools
  World Class Biz
 

   

 

 

 

 

We've
 been on
the Net
since 1995

 

Tax Filing 101: It's Never Too Early To Procrastinate

For all you procrastinators out there, here's a nuts 'n bolts guide on how to legally postpone the filing of your income tax returns.

When it comes to putting things off, you can never plan too far ahead!

In many cases the IRS allows you to file a 'no-questions- asked' extension form. Which particular form you file depends on what type of entity your business happens to be.

Corporations: Whether you're a "C" Corporation or an "S" Corporation, you must file Form 7004 by March 15. Doing so grants you an automatic 6-month extension for filing Form 1120 ("C" Corp) or Form 1120S ("S" Corp). So now you have until September 15 to file your corporate income tax return.

To get a copy of Form 7004, click here:

http://www.irs.gov/pub/irs-pdf/f7004.pdf

http://www.irs.gov/pub/irs-fill/f7004.pdf

Note: all the links in this article take you to the IRS forms website. If "irs-pdf" is in the link, then you'll be taken to a pdf file that can be saved to your hard drive or printed out; then you can complete the form by hand and mail it to the IRS.

If "irs-fill" is in the link, you'll be taken to a pdf file with fill-in-the-blank capabilities, enabling you  to complete the form online and then print it out immediately, without having to complete the form by hand.

Partnerships: You need to file Form 8736 by April 15. This obtains a 3-month extension to file Form 1065.

http://www.irs.gov/pub/irs-pdf/f8736.pdf

http://www.irs.gov/pub/irs-fill/f8736.pdf

Limited Liability Companies (LLC): Same as partnerships—File 8736 by April 15 to get a 3-month extension to file Form 1065.

(The LLC is a cross between a corporation and a partnership. Legally, the LLC is similar to a corporation, offering limited liability to the owners. For tax purposes, the LLC is treated like a partnership.)

Sole Proprietorship: You need to file Form 4868 to get an automatic 4-month extension to file your personal income tax return.

http://www.irs.gov/pub/irs-pdf/f4868.pdf

http://www.irs.gov/pub/irs-fill/f4868.pdf

Now, before you start extending to your heart's content, please keep the following guidelines in mind.

Extension Tip #1
Never forget the mantra of all tax extension forms:

The extension to file the return is NOT an extension to pay any tax due. It's only an extension for the filing of your tax return.

In other words, don't view the extension as an opportunity to legally postpone the payment of your tax.

So if you have a balance due on the return, then you must still pay the tax by the original tax return due date. If you file the extension but don't pay the balance due on time, then you'll pay penalty and interest for late payment of tax. (You will legally avoid the penalty for late filing, however.)

So what's the point in filing an extension if you still have to pay the tax?

Three possible scenarios—first, some folks get most of their "tax stuff" organized and are able to get enough of their return done to get the big picture: "Do I owe or am I getting a refund." You do the calculations, see where you stand, and if you owe, send in the extension form with a payment that's pretty close to the final figures.

You may have a few deductions that you need to research, one last shoebox to peruse. You need more time, that's all.

Second, you're running way behind on tax matters this year. Hey, it happens! There's no way you're going to get the return done on time, and you know you'll probably owe so, be sure to file the extension, even if you don't know how much you may owe or even if you can't make a payment with the extension. The reason? Because there are penalties for late filing and penalties for late payment of tax. By filing the extension, at least you avoid the late filing penalties.

In short, by filing the extension, you can save yourself some money!

The third scenario is even more common—you know you're getting a refund; you always get a refund. Maybe you're self-employed and your spouse has a W2 job, and the spouse's tax withholdings are always enough to cover both of you.  And you're in no hurry to get the refund.

Which brings me to . . .

Extension Tip #2
If you're getting a refund on your personal return, you have 3 years to file the return to claim the refund, without any fear of a late filing penalty.

That's right. As long as you file your return within 3 years of the original due date (for Year 2002 returns due April 15, 2003—that would be April 15, 2006), you'll get your refund and there is no penalty for "filing late"—even if you file after the extended due date of August 15.

Bottom line: if you think you may owe, if at all possible, do enough calculating to send in a payment with the extension; if you're getting a refund, still send in the extension (just to be safe), but relax, you've got plenty of time to get your money back (assuming you didn't need it yesterday!).

Oh, one more thing . . .

Extension Tip #3
This article only deals with federal extension rules. State rules vary considerably, so be sure to check with your state's tax department or your local tax professional to get the scoop on the extension rules for your particular state.

Some states simply piggyback off the federal rules. Others don't. So be careful here or you could be penalized severely for assuming that your state's rules are the same as the feds.

Many Happy Returns!

.....................

Wayne M. Davies is author of the new eBook, "The Tax Reduction Toolkit: 29 Little-Known Legal Loopholes That Will Reduce Your Taxes By Thousands (For Small Business Owners and Self-Employed People Only!) Don't file another tax return until you visit: http://YouSaveOnTaxes.com

 

 

Note: This article is
intended for US taxpayers.

 

 

© Copyright Success Networks International.
SuccessNet is a worldwide association committed to helping people become more knowledgeable, productive and effective. Their mission is to inform, inspire and empower people to be their best—personally and professionally. Free subscriptions, books and SuccessMark™ Cards available at
www.SuccessNet.org
Send This Page to a Friend

2048 Win-Win Way
South Burlington, Vermont 05407-2048 USA
BeYourBest@SuccessNet.org

 

Last Updated 03/09/2004