How do I extend / file an extension for my Federal or Massachusetts Tax return?

Spring has sprung and with April 15th just around the corner, many individuals are still scrambling to file their Federal and State tax returns on time. If this is you, you should probably request for an extension of time to file your return and do it right.  Even if you can not pay what you owe yet, your penalties will be much less (for the federal return at least).  

The purpose of filing and extension is to allow the taxpayer more time to gather his or her financial information to file a complete return, without facing a late filing penalty.

Extending your Federal Tax Return

Anyone is eligible for a 6 month extension to file their federal income tax as long as they file Form 4868 postmarked by April 15th. This would extend the filing deadline of the federal tax return from April 15th to October 15th. 

Form 4868 should be filed alongside payment (use a 1040-V).

An extension is only valid for filing the return and avoiding failure to file penalty; if you do not pay your tax liability by 4/15 you be subject to the failure to pay penalty and interest on whatever you end up owing.

The failure to pay penalty is only ½ of 1 percent of your unpaid taxes for each month or part of a month after the due date that the taxes are not paid.  (Failure to file is 5%/month!! max of 25%)

 The Interest rate is the current short term AFR + 3% APR (.25%/month)

Oh, and the address where you need to mail the extension is in the form instructions.

Extending your Massachusetts (Form 1) Return

Massachusetts Department of Revenue offers Form M-4898 (Application for an Automatic Six-month Extension of Time to File your Personal Income Tax Return) which can also be done online. Tax payments of $5,000 or more are mandated to be filed electronically.

Once again, the extension of time to file the MA income tax return does not extend the due date for payment of any tax that would have been due on 4/15.

For Massachusetts, the extension is considered void if 80% of the total income tax liability has not been paid. Void extensions are subject to Massachusetts failure to file and failure to pay penalties (combined to 2% per month) and interest charges from the original due date.

However, if an individual calculates no tax due with Form M-4868 and 100% of his or her tax due was paid through withholding, estimated payments of tax, and credits or refunds in the prior year, then Form M-4868 is not required to be filed.

More information

IRS website http://www.irs.gov/uac/Extension-of-Time-To-File-Your-Tax-Return and for Massachusetts State extension filing http://www.mass.gov/dor/individuals/filing-and-payment-information/filing-options/webfile-and-electronic-filing/automatic-extensions-on-the-web.html .

Here is a good nytimes article.

We are Prepared Accounting in Northampton, MA and we prepare and prepare for tax returns.