• The taxpayer must understand that any tax liability (which must be estimated) must be paid to the IRS and/or CA by the spring filing deadline, otherwise interest and/or a penalty will accrue. An extension doesn’t avoid penalties for underpayment of taxes.
    • There’s no point in filing an extension if no payment will be made with the extension request: if the taxpayer owes money when (finally) filing, but does not pay anything with the extension, then the IRS is likely to treat the matter as a late filing, disregarding the extension request. And if the taxpayer owes no money or is getting a refund, there’s no point in requesting an extension because they won’t have a late-filing penalty.
  • An automatic six-month extension of time to file a federal return is available to most taxpayers. There are five ways do this.
        • Processing fees are charged (and paid to third parties). For credit cards, the fee is approximately 2% of the payment; the exact fee varies by processing company.
    • Filing Form 4868 by phone (888-972-9829, 888-729-1040, or 888-872-9829), which requires making a payment by credit card or other electronic method
    • On IRS.gov, using Free File software, regardless of income
    • By printing and mailing Form 4868, with a check
    • Through TaxSlayer, with approval of the LC
      • Form 4868 should be e-filed only if the taxpayer is expected to come back to have their full tax return filed by Tax-Aide.
        • If the taxpayer won’t be back to do the full return, then it is much quicker to help the taxpayer use the direct payment option at irs.gov (see above), if wanting to pay by direct debit, or to use a paper Form 4868, if paying by check.
  • To prepare a Form 4868 using TaxSlayer (again, this is not the norm):
    • Enter name and address information in the Basic Information section. 
    • Don’t enter information in the Federal or State sections unless the site is open after the April filing deadline, and the taxpayer will return to the site to complete the return.
    • Go to Form 4868 - Application for Extension [Federal Section > Miscellaneous Forms > Application for Extension].
    • Fill in the requested dollar amounts.
      • “Tax Liability” is an estimate of the amount that will be on Form 1040 Line 24, Total Tax, when filed. (Use Line 24 of the prior year’s tax return, if available, as a starting point.}
      • “Tax Payments” is an estimate of the amount that will be on Form 1040 Lines 25d plus 26, when filed, not including the amount on Schedule 3 Line 9 (the amount being paid with the request for extension). As a starting point, total the amount of federal taxes withheld on available taxpayer documents, plus federal estimated tax payments made. 
    • Check the box “I was out of the country” if the taxpayer expects to be out of the country on the regular due date.
    • After entering a dollar amount for “Amount Paid with Extension”, tab – do not click “Go to Extension Payment” or “Continue”. TaxSlayer asks “Would you like to pay your balance due electronically?” 
      • If you check the box (“Yes”), TaxSlayer extends the page so that bank information can be entered. 
      • If you don’t check the box, the taxpayer will pay by check. [If paying with a credit or a debit card, Form 4868 should not be prepared through TaxSlayer, as discussed above.]
      • Click “Continue.”
    • If the taxpayer pays by direct debit, e-file the request for extension. (If paying by check, don’t e-file.)
      • Go to the E-file section.
      • The Application for Extension Found page will appear. Click “File Extension.” 
      • The Submit Extension page appears. Click “I Understand” and then “Continue.” 
      • On the Review page, enter any five-digit number for the taxpayer (and, if MFJ, do similar for the spouse), then click “Continue.” 
      • You’ll see a page saying that the extension request has been submitted; click “Continue” to complete the process.
    • If the taxpayer pays by check, mail a printed copy of the Form 4868 with the check. Print this form page from the standard PDF of the return.
      • Do not e-file if the taxpayer will pay by check.
    • Printing any other pages of the return for the taxpayer is not recommended: the return is incomplete and won’t be filed. Printing may lead the taxpayer to believe that the return was in fact e-filed.
      • If you do print any pages, write “DRAFT” should be written on each page.
  • IMPORTANT: Regardless of how the request for an extension is made, tell the taxpayer that their federal and state tax returns must be complete and filed by October 15 to avoid penalties for late filing. If there are any Tax-Aide or VITA sites in your district or a nearby district that will be open after the April filing deadline, give that information to the taxpayer.
  • Note for CA returns: CA grants an automatic extension of time to file provided that the tax is paid in full by the due date.
    • No form is needed if the taxpayer does not expect to owe any money when the CA return is filed.
  • If payment will be mailed to the FTB, CA Form 3519 is the accompanying voucher.
    • Extension payments can also be made online: go to FTB.ca.gov/Payment options. 
    • “Web pay” is a debit from a checking or savings account; the other option is to pay by credit card (2.3% service fee).

Created with the Personal Edition of HelpNDoc: Transform Your Documentation Process with HelpNDoc's Project Analyzer