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Extending the April 15 Tax Deadline posted on Tuesday, 07 April 2009

With less than two weeks until April 15, many business owners and consumers are exploring alternatives to the tax deadline.

By Ryan Thompson, CEO FileLater

In San Diego business, people procrastinate paying their taxes for many reasons: they need to get organized, need more time to find every possible deduction, do not have the money to pay for an accountant, or don’t know all of their options. For people facing any or all of these scenarios, it may be time to file for a tax extension.

Many business owners don’t know the facts about extending their tax deadline. They think tax extensions are hard to get or that by filing an extension they’re more likely to be audited. As it turns out, these are both myths. Obtaining a tax extension is quite simple and no reason for extending needs to be provided. By simply submitting your extension request accurately and on time, the IRS will extend your deadline to October 15 (September 15 for businesses).

The link between tax extensions and audits has also been generally dismissed due to the fact that there are 15 million tax extensions filed each year and no way for the agency to handle that many audits.

While filing for an extension does grant the San Diego taxpayer additional time to fill out their return, it is important to note that it is not an extension to pay. When a business owner extends their deadline, they are required to estimate how much they would owe and send in a payment with their extension. For those unable to file and or make any payments presently, filing a tax extension will save them money as the failure to file penalty, which is avoided by filing for a tax extension, is much steeper than the failure to pay penalty.

If a San Diego business owner files for a tax extension and does not pay the amount due by the regular due date, they will owe interest and could also be subject to payment penalties. The late payment penalty is usually 0.5 percent of the taxes not paid, per month. For example, if you have $2,000 of unpaid taxes, the IRS may charge you $10 per month as a late payment penalty.

Without an extension, the penalty is 5 percent of the taxes unpaid per month. An unpaid balance of $2000 would therefore have a late penalty of $100 per month.

To fill out the tax extension forms, consumers and business owners in San Diego have a couple of options. They can print out forms 7004 and 4868 from the IRS website, fill them out and mail them in before the April 15th deadline. For the extreme procrastinators, or anyone looking for guidance while filling out the forms, there are online options, like FileLater, where they will have access to jargon free forms, payment estimate calculators and customer support. Filing online is also the only way to receive a confirmation that the extension was received and approved by the IRS.

After three years at Turbo Tax, Ryan Thompson co-founded FileLater in 2008 to create an easy, online solution for extending the tax deadline. FileLater allows individuals and businesses to file tax extensions using IRS e-file technology. The service provides customer support, a payment estimate calculator and a confirmation of approval by the IRS.

Posted by Ryan Thompson | 1 Comments