It’s fast approaching– that dreaded April 15th Tax Deadline. You procrastinated just like everyone else, and now you discover that you don’t have everything ready to file your Federal Income Taxes. Many businesses and individuals find themselves in this situation (about 7 percent of all taxpayers file an extension). It’s not a big deal, unless you do nothing.
Think that an extension will trigger an audit? According to the IRS, about 10 million taxpayers file an extension and it would be beyond their capability to audit that many returns. Many business owners file them routinely, and accountants say they have seen no correlation between filing an extension and getting audited. The IRS does require taxpayers seeking extensions to make a good-faith estimate of how much they owe when they complete the extension form (Form 4868). The instructions for the form state that taxpayers are not required to pay their taxes now, although they do warn that taxes not paid by the regular due date (April 15 for most taxpayers) will be subject to interest and possibly penalties.
To get an extension, a taxpayer needs to complete Form 4868 and send it electronically, by regular mail or overnight delivery service before the April 15 deadline. For more information about extensions, and to download Form 4868, owners should visit the IRS Web site, http://www.irs.gov .
How does your business file taxes? Do you use an accountant? Does your accountant file the extension for your business?