Wednesday, April 12, 2006

I Haven’t Yet Filed My Taxes: My Situation & Advice For Those Considering Extensions

We delayed filing this year’s return because we noticed that we owed money. This year additionally marks my first year of using TaxCut (H&R Block). I typically use Quicken’s Turbo Tax but switched this year after getting TaxCut for much less than what I would otherwise pay for Turbo Tax. I prefer Turbo Tax more; however, my preference may be due, at least in part, because I’m so use to using Turbo Tax and am just now learning TaxCut.

Ok, now to the advice for those filing extensions:

My advice: Don’t do it unless you have some extenuating circumstance(s) that preclude you from doing it by Apr 17th. It will likely cost you more time and money in tax preparer fees. You should ignore this advice and consider an extension if there are pieces of information missing that would preclude you from filing your return with confidence.

Other Advice (Source: H&R Block, Fleishman-Hillard):
(1) EXTENSIONS – Filing Form 4868 will get you an extension until October 16th.
(2) LIVING ABROAD - Taxpayers living outside the US have an automatic two-month extension to June 15th. These taxpayers can get an additional 4-month extension by filing Form 4868. They may get extensions beyond this but should consult a professional or other reference for additional info.
(3) PAYMENT RESPONSIBILITY - Extensions do not give taxpayers more time to pay their tax bill. Taxpayers should estimate their tax liability and pay as much as they can by April 17. Underpayments are subject to penalties and interest.
(4) FILE EVEN IF YOU CAN’T PAY – If taxpayers complete their returns but are unable to pay the tax due in full, they should file their returns by April 17, and submit with as much of the tax due as possible. The IRS will send the taxpayer a bill or notice for the balance due. Installment agreements are another option. The IRS charges a $43 fee to set up an installment agreement. It will also charge interest and, sometimes, penalties on the unpaid balance.

These pearls of tax wisdom were handed to me with some imbedded advertisements for H&R Block. In all fairness, I’m passing through some of those advertisements below:

(1) Taxpayer may visit to file an extension electronically or to find the nearest year-round H&R Block office.
(2) If you want to pay your taxes with credit card, H&R Block will reduce the 2.49% fee to a 1.99% if you use a Visa credit card
(3) More than 4,000 H&R Block offices nationwide are open year-round.
(4) For more H&R Block help may be obtained at

(Disclaimer: I’m neither an H&R Block shareholder nor receiving any other forms of compensation from H&R Block. Additionally, I’m not a licensed tax professional)

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