I prefer form 5050. With that form, you send it in, and they spin a big wheel which says if you owe or are owed money, and how much.

But seriously. Just do what I did. I signed up to have my SS# unlisted. Yeah, it's a few extra dollars a month, but it pays off in the end.

Is filing on time that hard? I'm serious, why is an extension to file the most requested form? I don't get it, especially if you are getting a refund.

@Tuuurd_Ferguson: I don't understand it either.

It seems to me knowing that you owe or are going to receive a refund requires that a pretty substantial portion of your 'tax legwork,' as it were, is already done. Why not get it over and done with?

I understand that there are businesses that have difficulty with them due to all the rules, but that's one of the reasons you'd hire a CPA or something to do them for you: handling financials seems like one of those things that's so complex and so fraught with peril that you'd be stupid *not* to have someone else handle it.

Face it: it's not like tax season is a surprise to anyone.

@discordance: Most people who file an extension actually file because they OWE money (ie me two years ago) so its really an extension so you can come up with the money because you or your employer miscalculated on your W-4

The family CPA got ours done about three months ago. I suspect at some point I'll have to actually do my own taxes, but for now I'll continue accepting that my parents' CPA will do mine for free.

@pecan 3.14159265: TurboTax. I swear they should pay me for all the good things I say about them.

@Tuuurd_Ferguson: Depends on your circumstances. My business partner and I usually have to file extensions. You have all the regular 1040 stuff and on top of that you have all the S corporation stuff, estimated payments etc. etc. It usually takes a while to get all that figured out, especially when you have to account for receivables, depreciation, etc.

@undefined: My CPA gets extremely busy during tax time and generally files extensions for all of his clients who are due refunds.

@Yokai Monsters Spook Warfare: That doesn't make sense - since you have to pay 90% of what you owe on time (or you'll start accumulating fines). If you owe $500, you still have to pay $450 by 4/15. I doubt people file an extension simply to "come up with" the last 10% most of the time.

@Tuuurd_Ferguson: B/c someone else is being a pain in getting you information? You have to hunt down some records from one of the many companies that have gone under? Information got lost, needs to be replaced? Etc...

@Yokai Monsters Spook Warfare:

But you still need to send in 90% of your underpayment so how does the extension help. I am not trying to be combative, I am just curious.

If you're absolutely sure they owe you money and not the other way around you can skip the extension form altogether. There's no penalty if they owe you money.

Of course, chances are the only way you're totally sure is if you've already done them, but even then, weird cases come up. For instance, I completed my taxes a few years back, was all set to send them in, and realized I couldn't find my W2 anywhere. I looked all over the place, high and low, and finally gave up, resolving to send in my 1040 whenever it finally turned up. Ended up finding it a month later, where I had left it, sitting on my scanner so I could make a copy before sending it in.

Anyway, point is, if they owe you money, don't stress too much about the 15th. Of course, you're forgoing the interest (I think they pay you interest on your eventual refund, but the rate sucks and it just means one more thing you have to report next year), but you're not going to go to jail or anything if you don't file an extension.

Now, it says " However, you still need to send in 90% of your total tax due otherwise you'll get fines."

I have the feeling people aren't going to be sending in the 90% if they file an extension-
They're probably sending in 60% at most, and taking the fines because they have no other recourse.

*waves*
Like me.

@Kryndis: Good to know. I finished mine in TurboTax but I was amazed/annoyed at how little I'm getting back (compared to last year) so I didn't file it yet. I have been meaning to redo it but I just haven't gotten to it.

If you're not done figuring out your taxes and need an extension, how will you know what 90% of your taxes due is?

More of a rhetorical question than anything, as I realize that most of those folks file an extension just need the time to come up with the extra scratch. I just like pointing out Catch 22s.

@Canino: I can understand some small businesses needing more time. My question was more for the individual taxpayer. As wgrune says, I too am just curious, I think my original post sounded a little harsh.

If you don't cover 90% of your tax liability then your extension becomes null and void. You'll be charged for late filing, penalties, and interest. If you are that strapped for cash file your return on time and file for an installment agreement. Most of the extensions that I file are people that just can't get everything ready in time. They're also returns that are more complex than the average. One point that is missing is that you should mail your 4868 certified mail return receipt. If the IRS doesn't get it, you didn't file it.

@LastVigilante:

You can plug in the variables you do know and make an educated guess on the variables you don't have (e.g., K-1 from a LLC passthrough that extneded thier return).

Any extension payment is treated like withholding when the 1040 is filed. If too much is paid in, the balance is refunded. Too little, then you owe that amount plus interest. A late filing penalty of 5% is charged to the balance due if eithe a) an extension has not been filed or b) 90% of the tax liability was not covered by withholding, estimated tax payments or extension payments.

@Tuuurd_Ferguson: We didn't get our mortgage 1098 until late March -- because of the deadline extension until the end of February, we didn't get all our 1099s until the first week of March, and only then did we realize that the mortgage lender either hadn't sent the 1098 or it had gotten lost in the mail.

That REALLY delayed our ability to get certain sections of the forms filled out, and by the time the form finally came, I was 7 1/2 months pregnant and in the last three weeks of a political campaign that culminated in an April 7 election, while my husband was panickedly working on two simultaneous litigation deadlines. Our final compilation JUST got to our CPA (i.e., my father-in-law) today (two-day priority mail my ass). I think I mailed everything on the 9th, which I consider pretty good since I had no free time until after the election on the 7th and then spent two solid days with my phone ringing constantly.

So yeah. We filed the extension this year. And we're due a refund.

Had we gotten all the forms on time, we probably would have filed on time, but we didn't, so we didn't.

@Kryndis: I had a Homer Simpson moment a few years back; my brother and father gave me their tax returns to mail along with mine. I went to the post office, grabbed theirs, and somehow mine fell between the two front seats of my car. Fast forward six months (that's when the Homer Simpson moment occured - DOH!) and I made a frantic call to the IRS to make sure that they weren't going to come and throw me in the hoosegow. Once we established that I was 100% sure I was getting a refund, the IRS clerk I talked to confirmed - if you are owed money, the time limit is something like three years to file your returns.

@wgrune: Just because you are suppose to send 90% doesn't mean you have to. I am filing an extension because I owe a lot more then I currently have in my bank account. In a few months I will have the money and I will pay the fine. It's not as much as the IRS pretends it is and in the mean time it keeps the IRS off your back

@Wild Monkey:

Just to clarify, the mailbox rule applies to tax returns. If the return is postmarked no later than the 15th, then it's judged received by the IRS.

@BlueLabCoatWanting_GitEmSteveDave: Vlever, sir. Very clever...

@Kryndis

They don't pay you interest. If you file 4 years later, you get the same amount.

I find it funny how many people in this country know so very little about taxes.

"I suspect at some point I'll have to actually do my own taxes, but for now I'll continue accepting that my parents' CPA will do mine for free."

I hear this type of talk all the time from people who would simply have to copy their info from their W-2 onto a 1040 EZ then look at the tax tables to find out if they owe or get a refund.

And then it only gets worse when the taxes get more complicated because there are so many credits and deductions you could be planning ahead for throughout the year, especially if you are running a small biz, that if you leave it to your CPA to find out which ones you "stumbled" into you are not making the most of the credits, etc...

Teach a man to fish and...

@discordance: I agree a lot of the work is done if you're filing an extension .

I've used them for anything from lazyness to needing consultations . When I use an extension I do them really fast once and use the first set of crude numbers . I do my taxes 3 times to get them right-at a much slower and thorough pace . That's my rule : once I get the same sets of numbers 2-3 times in a row then I consider them done .

@Tuuurd_Ferguson: Well, in my case my father took seriously ill very suddenly (like, ten days ago) and I'm going to have to do his taxes. It will take me some time to get his paperwork together, so I'm filing for an extension in his name.

@Tuuurd_Ferguson: I plan on buying a house this year, before Dec 1, and want to claim the credit for my '08 taxes. That means either filing and then amending or just getting an extention. Since I would owe a couple hundred without the credit, it just makes more sense for me to extend until I get the house.

I imagine that most folks planning on buying between 4/15 and 12/1 are going to go the extension route this year.