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If you're going to be late, file an extension


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POSTED: Sunday, April 05, 2009

It's April 5th and it looks like you won't be able to get your individual tax returns due in time for the April 15th deadline.

What do you do?

How about filing an extension?

Individual taxpayers who are unable to file their federal income taxes before April 15 may file Form 4868 to apply for a six-month extension (until Oct. 15, 2009) to file Forms 1040, 1040A, 1040EZ, 1040NR or 1040NR-EZ.

There are three ways to file for an income tax extension:

» File Form 4868 electronically by accessing IRS e-file using a home computer or a tax professional who uses e-file.

Refer to your tax software package or tax preparer for ways to file electronically. Be sure to have a copy of your 2007 tax return — you will be asked to provide information from the return for verification. If you wish to make a payment, you can pay by electronic funds withdrawal or send your check or money order directly to the IRS.

» File a paper Form 4868. This can be found on the IRS' Web site, at http://www.irs.gov.

» Pay all or part of the estimated income tax due using a credit card through the IRS' Web site; click e-file.

» You can also pay by phone or Internet through one of the following service providers:

* Official Payments Corp., 1-800-2PAY-TAX / www.officialpayments.com

* Link2Gov Corp.: 1-888-PAY-1040 / www.PAY1040.com

Please note that an extension of time to file is not an extension of time to pay taxes due. If income taxes are not paid in full by April 15, a taxpayer may be subject to interest and penalties on taxes due.

If on the regular due date of the income tax return a taxpayer is out of the country and is a U.S. citizen or resident, a taxpayer is allowed two extra months to file his or her return and pay any tax due without requesting an extension. However, interest will be charged from the original due date of the return on any unpaid tax.

If more time is needed, Form 4868 may be filed for an additional four months.

A taxpayer is considered out of the country if they live outside of the U.S. and Puerto Rico and their main place of work is outside of the U.S. or Puerto Rico, or they are in the military or naval service outside of the U.S. and Puerto Rico. In addition, a taxpayer must attach a statement to their timely filed income tax return showing that the requirements are met.

Hawaii income tax returns are due on April 20. In Hawaii, a taxpayer is not required to file any form to request an extension to file Form N-11, N-13 or N-15.

A six-month extension is automatically granted as long as four conditions are met:

» 100 percent of the properly estimated tax liability is paid.

» The tax return is filed on or before the expiration of the six-month extension period.

» The tax return is accompanied by full payment of any tax not already paid.

» The taxpayer is not under court order to file a tax return on or before the prescribed due date.

For Hawaii, Form N-101A is used to make a payment toward the balance due with the filing of Form N-11, N-13 or N-15.

There's still time to file your return by April 15th. If you think you will need more time, consider an extension.

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Ken Kretzer is a senior manager for the Honolulu office of Grant Thornton LLP. He can be reached at   .(JavaScript must be enabled to view this email address).