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What Forms to File For a Tax Extension?

April 15th, 2011
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During this hectic time of year, millions of people find that they have very little time to file their tax returns.  Fortunately, Uncle Sam is willing to be flexible and will accept tax returns after the traditional April deadline.  This can be made possible by filing a tax extension with the IRS.  There are several different IRS Forms that can be filed and each one is very different.  The 3 major IRS Forms for Tax Extensions are Form 7004, Form 4868, and Form 8868.  Businesses typically file a Form 7004 in March to apply for a 5-6 month Tax Extension.  Individuals file a Form 4868 in April for an automatic 6 month tax extension.  Non Profit Organizations use the Form 8868 to receive a 3 month tax extension.  

Businesses that may file Form 7004 include Multi Member LLC’s, C-Corporations, S-Corporations, Partnerships, Trusts, and Estates.  Businesses often find themselves overwhelmed, and since there are such few reasons to not file an extension, it is becoming increasingly normal.  Also, once a business get used to filing an extension, it becomes more difficult to go back to the traditional filing deadline.

Individuals wishing to file an extension with form 4868 can apply in April, and extend their filing deadline until October.  The IRS Form 4868 can be used for Personal Returns, 1099 Contractors, Sole Proprietorships , and Single Member LLC’s.

Non-Profit Organizations wishing to file a tax extension  can do so by filing Form 8868.  This form grants a 3 month extension of time to file.  They can then file an additional 3 month extension of time after that.  Groups that can file this return include Non-Profits and Exempt Organizations.

All of these forms can be E-Filed with the IRS from the comfort of your own home or office.  One of the best online providers of this is ExpressExtension.com.  They can E-File these forms with the IRS in minutes and the user will receive a confirmation from the IRS automatically.

Author: Categories: Business Tax Extension, E-filing tax extension with IRS, filing a tax extension, Form 4868, Form 7004, Personal Tax Extension, six months tax extension, Tax Extension Tags: , , , , , , , , ,

IRS Six Tips for Paying Estimated Taxes

April 6th, 2011
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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.
1.     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.
2.     As a general rule, you must pay estimated taxes in 2011 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 2011 taxes or 100% of the tax on your 2010 return. There are special rules for farmers, fishermen, certain household employers and certain higher income taxpayers.
3.     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.
4.     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.
5.     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.
6.     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, as well as Publication 505, Tax Withholding and Estimated Tax. These forms and publications are available at http://www.irs.gov .
Author: Categories: Business Tax Extension, E-file tax extension, Form 4868, Form 7004, Form 8868, IRS six tips for paying estimated taxes, Personal Tax Extension, six months tax extension, Tax Extension e-filing, Tax Extension with the IRS Tags: , , , , , , , , , , ,
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