Extension Tax: January 2012

Friday, January 27, 2012

How Filing Tax Extensions Works.

April 17: A day of Horror.

People rush to complete their Tax forms and race to the post office to mail their forms, only to discover that a long line awaits them. If you get your envelope postmarked before midnight, you're in the clear, nothing to worry about.

But what if you didn't beat the deadline? What if you forgot to file? Or what if you couldn't file because you didn't have all the necessary information to fill out your Form 1040? Even worse, what if you owe thousands of dollars more than you thought you would, because you claimed too many exemptions on your W-4, and there is just no way you can pay it all right now?

Luckily the IRS has seen every one of these situations and has a solution for it.

Some people in the United States file their federal income tax returns before April 15 -- sometimes long before. Others file their returns at 11:50 p.m. on April 15.But you may need even more time. If you haven't received all of your 1099 or W-2 forms -- records of how much income you have received from various sources -- you may not have all the numbers you need to fill out your 1040. Or maybe you don't have the numbers from your 1098 interest forms. Or maybe your tax return is just enormously complicated and you haven't had time to work on it.

Whatever the case, the worst thing you can do is to not file for an extension. Fortunately, it's really very simple, File IRS Form 4868 by April 17.Filling out Form 4868, can give you an extra six months to file most federal income tax forms, including the 1040, 1040A, 1040EZ, 1040NR and 1040NR-EZ.The IRS grants you an extension, your new filing deadline becomes October 15.

You can E-file Form 4868 with www.extensiontax.com.The IRS wants you to make a payment on your estimated tax liability when you file Form 4868, because a filing extension is not a payment extension. Any tax you owe begins to accrue late payment penalties and interest after April 17.

Oops. You didn't file for an extension. What will the IRS do to you?

Back in high school, when you turned in a term paper late, your grade was probably reduced for your delay. The Internal Revenue Service operates on the same principle. Even if you only need an extra week to file your return, use Form 4868 to file for an extension. A week may not seem like much, but you're better off avoiding the late penalty.

Millions of people e-file their tax extension forms every year. The IRS has a digital initiative–a push to get up to 80 percent of their forms online–and tax extensions are included in that. E-filing a federal personal, business and nonprofit tax extension with Form 4868, 7004and 8868 is quick and easy. A tax extension extends the time to file, not to pay taxes (if they are owed).

www.ExtensionTax.com is committed to provide the Best in Quality and Service for all our users, www.ExtensionTax.com /www.TaxExcise.com is a certified, IRS authorized, e-file service provider for Form 2290, Form8849, Form720 & Extensions for Form4868, Form8868 and Form7004.

www.ExtensionTax.com /www.TaxExcise.com are products of Think Trade Inc. We are a BBB accredited company with A+ certification.For any questions you may have regarding Excise Tax Filings please reach us at 1-866-245-3918 or simply write to us at support@extensiontax.com / support@taxexcise.com

Tuesday, January 24, 2012

IRS Reminds Parents of Ten Tax Benefits

Your kids can be helpful at tax time. That doesn't mean they'll sort your tax receipts or refill your coffee, but those charming children may help you qualify for some valuable tax benefits.

Here are 10 things the IRS wants parents to consider when filing their taxes this year.

1. Dependents In most cases, a child can be claimed as a dependent in the year they were born.

2. Child Tax Credit You may be able to take this credit for each of your children under age 17. If you do not benefit from the full amount of the Child Tax Credit, you may be eligible for the Additional Child Tax Credit.

3. Child and Dependent Care Credit You may be able to claim this credit if you pay someone to care for your child or children under age 13 so that you can work or look for work.

4. Earned Income Tax Credit The EITC is a tax benefit for certain people who work and have earned income from wages, self-employment or farming. EITC reduces the amount of tax you owe and may also give you a refund.

5. Adoption Credit You may be able to take a tax credit for qualifying expenses paid to adopt an eligible child. If you claim the adoption credit, you must file a paper tax return with required adoption-related documents.

6. Children with earned income If your child has income earned from working, they may be required to file a tax return.

7. Children with investment income Under certain circumstances a child’s investment income may be taxed at their parent’s tax rate.

8. Higher education credits Education tax credits can help offset the costs of higher education. The American Opportunity and the Lifetime Learning Credits are education credits that can reduce your federal income tax dollar-for-dollar.

9. Student loan interest You may be able to deduct interest paid on a qualified student loan, even if you do not itemize your deductions.

10. Self-employed health insurance deduction If you were self-employed and paid for health insurance, you may be able to deduct any premiums you paid for coverage for any child of yours who was under age 27 at the end of the year, even if the child was not your dependent.

Forms and publications on these topics are available at www.irs.gov or by calling 800-TAX-FORM (800-829-3676).

E-file your IRS Tax Extensions with www.ExtensionTax.com.

www.ExtensionTax.com is committed to provide the Best in Quality and Service for all our users, www.ExtensionTax.com / www.TaxExcise.com is a certified, IRS authorized, e-file service provider for Extensions for Form4868, Form8868 and Form7004 & for Form 2290, Form8849, Form720 .

www.ExtensionTax.com / www.TaxExcise.com are products of Think Trade Inc. We are a BBB accredited company with A+ certification.

For any questions you may have regarding Excise Tax Filings please reach us at 1-866-245-3918 or simply write to us at support@extensiontax.com / support@taxexcise.com.

Friday, January 20, 2012

Six Tips for Paying Estimated Taxes

Estimated tax is a method used to pay tax on income that is not subject to withholding. You may need to pay estimated taxes during the year depending on what you do for a living and what type of income you receive.

These six tips from the IRS will provide you with a quick look at estimated taxes and how to pay them.

If you have income from sources such as self-employment, interest, dividends, alimony, rent, gains from the sales of assets, prizes or awards, then you may have to pay estimated tax.
As a general rule, you must pay estimated taxes in 2012 if both of these statements apply: 1) You expect to owe at least $1,000 in tax after subtracting your tax withholding (if you have any) and credits, and 2) You expect your withholding and credits to be less than the smaller of 90% of your 2012 taxes or 100% of the tax on your 2011 return. There are special rules for farmers, fishermen, certain household employers and certain higher income taxpayers.
For Sole Proprietors, Partners and S Corporation shareholders, you generally have to make estimated tax payments if you expect to owe $1,000 or more in tax when you file your return.
To figure your estimated tax, include your expected gross income, taxable income, taxes, deductions and credits for the year. Use the worksheet in Form 1040ES, Estimated Tax for Individuals for this. You want to be as accurate as possible to avoid penalties. Also, consider changes in your situation and recent tax law changes.
The year is divided into four payment periods, or due dates, for estimated tax purposes. Those dates generally are April 15, June 15, Sept. 15 and Jan. 15.
Form 1040ES, Estimated Tax for Individuals, provides all you’ll need to pay estimated taxes. This includes instructions, worksheets, schedules and payment vouchers. The easiest way to pay estimated taxes, however, is electronically through the Electronic Federal Tax Payment System or EFTPS. You can also pay estimated taxes by check or money order using the Estimated Tax Payment Voucher or by credit or debit card.

For more information on estimated taxes refer to Form 1040ES and its instructions, also available at http://www.irs.gov.

E-file your IRS Tax Extensions with www.ExtensionTax.com.

www.ExtensionTax.com / www.TaxExcise.com are products of Think Trade Inc. We are a BBB accredited company with A+ certification.

For any questions you may have regarding Excise Tax Filings please reach us at 1-866-245-3918 or simply write to us at support@extensiontax.com / support@taxexcise.com.

Thursday, January 19, 2012

Top 10 IRS TAX TIPS To Get More Time To Pay Your Taxes!!!

Taxpayers who owe taxes may be relieved to know that there are some options for those who owe and can’t afford to pay the full amount right away.

Here are the top 10 things the IRS wants you to know if you need more time to pay your taxes:

1. Taxpayers who are unable to pay all taxes due are encouraged to pay as much as possible. By paying as much as possible now, the amount of interest and penalties owed will be less.

2. Based on the circumstances, a taxpayer could qualify for an extension of time to pay, an installment agreement, temporary delay or an Offer in Compromise.

3. If you cannot pay the full amount, taxpayers should immediately call the number or write to the address on the bill they receive.

4. You may want to consider financing the full payment of your tax liability through a loan. The interest rate and fees charged by a bank or credit card company are usually lower than interest and penalties imposed by the Internal Revenue Code.

5. If you cannot pay in full immediately, you may qualify for a short amount of additional time, up to 120 days, to pay in full. No fee is charged for this type of payment arrangement and this option may minimize the amount of penalties and interest you incur.

6. You may also want to consider an installment agreement. This arrangement allows you to make monthly payments after a one-time fee of $105 is paid. If you choose to pay through a Direct Debit from your bank account, the fee is reduced to $52. Lower- income taxpayers may qualify for a reduced fee of $43.

7. To apply for an installment agreement you can use the Online Payment Agreement application available on the IRS website; file a Form 9465, Installment Agreement Request; or call the IRS at the telephone number shown on your bill.

8. In some cases, a taxpayer may qualify for an offer in compromise, an agreement between the taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed. Generally, an offer will not be accepted if the IRS believes that the liability can be paid in full as a lump sum or through a payment agreement.

9. Even if you set up an installment agreement, the IRS may still file a Notice of Federal Tax Lien to secure the government’s interest until you make the final payment.

10. It is important to respond to an IRS notice. If you do not pay your tax liability in full or make an alternative payment arrangement, the IRS is entitled to take collection action.

More information on the collection process is available at http://www.irs.gov.

E-file your IRS Tax Extensions with www.ExtensionTax.com.

www.ExtensionTax.com / www.TaxExcise.com are products of Think Trade Inc. We are a BBB accredited company with A+ certification.

For any questions you may have regarding Excise Tax Filings please reach us at 1-866-245-3918 or simply write to us at support@extensiontax.com / support@taxexcise.com.

Assumptions And Facts About Filing a Tax Extension

Taxes are unavoidable, and they must be paid. However, you can delay it by filing a Tax Extension. The IRS estimates that over 10 million individuals and businesses will file for a Tax Extension every year by filing IRS Form 4868, 7004 and 8868.

There are several popular assumptions about filing a tax extension that need to be clarified:

Assumption: A Tax Extension will delay the time you have to pay taxes.
Fact: Taxes Should Be Paid on Time! A Tax Extension extends the amount of time to file the tax return. This means that you have more time to prepare all of your tax-related documents and get the most out of your credits and refunds.

Assumption: The IRS will impose penalties if you file a tax extension.
Fact: The IRS will not penalize you as long as your application for extension is on time and your taxes are paid on time.

Assumption: The IRS requires a reason to file a tax extension.
Fact: Form 4868, 7004 and 8868 contains no questions inquiring why a tax extension is necessary. The form is very straight forward and easy to figure out.

Filing an extension with Form 4868, 7004 and 8868 has become much easier and quicker.This is because the option to E-File has become more and more popular as compared to traditional paper filing.

There are several online options for filing a Form 4868, 7004 and 8868 with the IRS. The best, easiest and cheapest is www.Extensiontax.com. This allows you to E-File Form 4868, 7004 and 8868 from your home or office. There is no need to go anywhere, mail anything, or worry about whether it gets there on time.

Wednesday, January 18, 2012

Why Filing An Extension Is Important?

Imagine opening a letter from the IRS assessing you a huge penalty because they claim you did not file your extension on time! There are several individuals who face this exact problem. The irritating part is that an extension request is an arguably meaningless filing since it is automatically granted if requested. But, the IRS takes it very serious.

So with April 17th fast approaching (taxes are not due on the 15^th due to the federal observation of the signing of the Compensated Emancipation Act by Abraham Lincoln in 1862), how can you protect yourself? If you are filing your own extension for your personal tax returns with the IRS use Form 4868. Be sure to get some kind of proof of delivery and make a copy of the extension. Even with delivery confirmation it is difficult to prove what you sent. The best way is to e-file the extension through Extensiontax.com that e-files and obtains an electronic confirmation.

BEWARE!! Just because you file an extension does not grant you additional time to pay! The tax you calculate on the return you are going to prepare and file by October is still due by April 17. So if you think you might not have enough tax withheld, you need to make some good estimates and send in some payments. You can send the payment Information with Form 4868, when E-filed and the money gets automatically debited from your bank account.

If you do not pay your tax or file your return on time, interest and penalties are calculated based on any amount of tax you come up short. Interest varies with market changes (currently 4 percent a year for the IRS). IRS late payment penalties are ½ percent of the balance each month (up to 25 percent). If you fail to timely file, the IRS penalties are 5 percent of the balance each month (up to 25 percent). You may also incur underpayment of estimated tax penalties depending on your circumstances.