If you´re trying to beat the tax deadline, there are several options for last-minute help. If you need a form or publication, find it on this Web site. If you discover you need more time to finish your return, get a four-month extension with Form 4868. And if you have trouble paying your tax bill, the IRS has several payment options available.

To get the automatic extension, file Form 4868, Application for Extension of Time to File U.S. Individual Income Tax Return, with the IRS by the regular April deadline, or make an extension-related electronic payment. You can now file your extension request by phone or by computer instead of using the paper Form 4868.

The extension will give you extra time to get the paperwork to the IRS, but it does not extend the time you have to pay any tax due. You have to make an accurate estimate of any tax due when you request an extension. You may also send a payment for the expected balance due, but this is not required to get the extension. However, you will owe interest on any amounts not paid by the April deadline, plus a late payment penalty if you have paid less than 90 percent of your total tax by that date.

The IRS has opened a special toll-free phone line for people who filed a 2002 return and want to file for an extension for their 2003 return by telephone. The number is 1-888-796-1074. Use Form 4868 as a worksheet to prepare for the call and have a copy of your 2002 tax return available.

The system will give you a confirmation number to signify that the extension request has been accepted. Put this confirmation number on your copy of Form 4868 and keep it for your records. Do not send the form to the IRS. If you apply for an extension using the toll-free telephone line, you can choose to pay any expected balance due by authorizing an automatic withdrawal from a checking or savings account, using the adjusted gross income from your 2002 return to verify your identity.

You may also e-file an extension request using your own tax preparation software or by going to a tax preparer. As with the phone system, computer filers must provide figures from the previous year´s tax return to verify identity.

If you determine that you need still more time to prepare and file your return beyond the initial four-month extension, you may be able to get two more months to file. You will have to either write to the IRS or file Form 2688, Application for Additional Extension of Time to File U.S. Individual Income Tax Return. You must give the IRS the reason why you need the second extension.

If your return is completed but you are unable to pay the tax due, do not request an extension. File your return on time and pay as much as you can. The IRS will send you a bill or notice for the balance due and will charge interest and penalties only on the unpaid balance.

Those who cannot pay the full tax due may qualify for an installment payment plan. You may request an installment agreement by completing Form 9465, Installment Agreement Request, either when you file the return or when you later get a bill from the IRS. List the proposed monthly payment amount and date. You may also choose to conveniently pay from your bank account each month through an automatic withdrawal program.

The IRS offers a streamlined approval process if the amount due is not more than $25,000 and you will pay the entire balance within a five-year period.

There is a $43 fee for setting up the installment agreement (do not include the fee with the agreement application form). Taxpayers will also pay interest, compounded daily, plus a late payment penalty. This penalty, usually 0.5 percent of the balance due per month, drops to 0.25 percent when the IRS approves the agreement, if the taxpayer filed the return on time and did not receive a levy notice.

Besides possibly qualifying for this reduced late payment penalty, people who cannot pay the taxes owed have another reason to file on time — to avoid the late filing penalty of five percent per month of the balance due. Sending as large a payment as possible with the return will lessen any interest and penalty charges.

This Web site has an interactive feature to help taxpayers determine their eligibility for an installment agreement. IRS forms are available by downloading them from this Web site, by calling toll free 1-800-TAX-FORM (1-800-829-3676), or from IRS TaxFax. From a fax machine, call 703-368-9694 (not a toll-free number) and enter number 11958 if you need Form 2688, 13141 for Form 4868 and 14842 for Form 9465 and you will receive your request by return fax. You may request up to three items per call. Taxpayers needing forms should act soon to be sure they have the item in time to meet the applicable deadlines.

Previous | Next

Tax Tips Index | 2003 Tax Year Archives | Tax Help Archives | Home