What Does Extending Your Taxes Mean to You?

Written by Tiffany J. Morisue


Continued from page 1

Yet another reason that some individuals do not want to extend is because they are inrepparttar process of buying a new home or refinancing and their lender is requesting a copy of their tax return. Many lenders will accept a copy of an extension along with copies of documents substantiating income (W-2s, 1099s, K-1s, etc.) and copies ofrepparttar 111734 prior year tax returns.

What information is needed to file an extension?

You will need your general taxpayer information, which includes your name, name of your spouse if married and filing a joint extension, your social security number, your spouse’s social security number (if applicable), and your complete address. To avoid potential delays inrepparttar 111735 processing of your extension, special attention is required if any ofrepparttar 111736 following apply: your name has changed due to marriage, divorce, etc.; your address has changed since you last filed a tax return; or you want to have correspondence related to your extension sent to your tax professional or otherwise. You should refer torepparttar 111737 instructions forrepparttar 111738 extension form to properly address any of these items.

There is not much other information needed. The items needed forrepparttar 111739 tax year thatrepparttar 111740 extension is for are an estimate of your total tax liability andrepparttar 111741 total tax paid. The estimate ofrepparttar 111742 total tax liability isrepparttar 111743 more difficult ofrepparttar 111744 two. You need to come up with your best estimate of whatrepparttar 111745 tax liability is. The IRS instructions forrepparttar 111746 completion of Form 4868, “Application for Automatic Extension of Time to File U.S. Individual Income Tax Return” clearly state: “Make your estimate as accurate as you can withrepparttar 111747 information you have. If we later find thatrepparttar 111748 estimate was not reasonable,repparttar 111749 extension will be null and void.” If that were to berepparttar 111750 case, your return would be considered late. A late filed return is subject to late filing and late payment penalties and interest.

How do I file an extension and, if applicable, payrepparttar 111751 (estimated) tax due?

Either you or your tax professional can prepare and file your extension. The methods for filing it include e-file by phone, e-file by computer, or filing a completed paper Form 4868. Regardless of who is going to prepare and file your extension,repparttar 111752 information discussed inrepparttar 111753 previous section will be needed. Thus, if you use a tax professional, you need to get in touch with him or her in advance ofrepparttar 111754 tax deadline to ensure that he or she has that information.

E-file by phone is a very convenient option if you are going to file your own extension. The Form 4868 and its instructions can be easily downloaded from www.irs.gov. After reviewingrepparttar 111755 instructions forrepparttar 111756 form, use Form 4868 as a worksheet and then callrepparttar 111757 toll free number inrepparttar 111758 instructions. You will be prompted forrepparttar 111759 information fromrepparttar 111760 completed form and given a confirmation number atrepparttar 111761 conclusion ofrepparttar 111762 call. In order to e-file by phone, you must have filed a federal return forrepparttar 111763 prior tax year.

As for payingrepparttar 111764 (estimated) amount due, you can do so via electronic funds withdrawal (EFT, from a checking or savings account), credit card, or check. The EFT option can be used if you e-file by phone or e-file by computer. You will need to enter additional information when filingrepparttar 111765 extension to include AGI (Adjusted Gross Income) from your prior year tax return andrepparttar 111766 routing and account numbers for your bank account. Payment by credit card can be done via one of several service providers, each of which charge a convenience fee based onrepparttar 111767 amount ofrepparttar 111768 tax payment being made. Payment by check can be made if you e-file by phone, e-file by computer, or file a paper extension form. More detail about these payment options is included inrepparttar 111769 instructions for Form 4868.

It should be noted that if you are a taxpayer that makes or should be making estimated tax payments, you should compute and timely make those payments forrepparttar 111770 current year even if you filed an extension. The federal income tax system is a “pay as you go” system and if you are self-employed or otherwise have income that results in a tax liability that is not paid via withholding, you may be required to make estimated tax payments throughoutrepparttar 111771 year. If you are not sure if this applies to you, it is recommended that you research this topic or consult with a tax professional.

For further information about filing a second extension, please refer torepparttar 111772 instructions for Form 2688, “Application for Additional Extension of Time to File U.S. Individual Income Tax Return” which can be easily downloaded fromrepparttar 111773 IRS website as www.irs.gov.

What about state, local, and other income tax returns?

Some states will acceptrepparttar 111774 federal extension while others require that you file an extension document with them. Ohio acceptsrepparttar 111775 federal extension and does not require that you send them a copy of it, though you do need to send inrepparttar 111776 tax due, if applicable, byrepparttar 111777 April 15th deadline. If you live in a state with municipal or other local income taxes, you may need to file an extension withrepparttar 111778 locality (or localities) that you have a filing responsibility with. Further discussion about state and municipal filing requirements are beyondrepparttar 111779 scope of this article as they vary from state to state. Check withrepparttar 111780 respective department(s) of taxation or your tax professional for more detail. Like withrepparttar 111781 federal extension, you generally need to pay any state or local tax due atrepparttar 111782 timerepparttar 111783 extension is filed.

In Conclusion

Whether you prepare your own taxes or work with a tax professional, I hope that you have a better understanding of what an extension is, when it should be considered, and what is involved in completing and filing one. If it is close torepparttar 111784 April 15th filing deadline and you have not finished or even started preparing your returns, you should consider filing an extension. This will allow additional time to ensure thatrepparttar 111785 returns are complete and accurate and, in turn, should reducerepparttar 111786 stress associated with filing your taxes.

This article may be republished, provided it is republished in its entirety,repparttar 111787 author is given full acknowledgement, and RightWay Unlimited is given full acknowledgement including linked URL.

RightWay Unlimited

Tiffany is the Owner of Morisue & Associates LLC and a contributing author to the Ohio based free consumer financial information portal- RightWayunlimited.com.

By Tiffany J. Morisue, CPA, 04/03/05 e-mail: tiffany@rrohio.com

Morisue & Associates, LLC dba ABC Solutions 3964 Brown Park Drive, Suite A Hilliard, Ohio 43026-1163 Ph. (614) 850-9440 Fax (614) 850-8770 www.abcsolutionsohio.com www.Rightwayunlimited.com


Benefits Tailored to the Changing Needs of Canadians

Written by Anna Dorbyk


Continued from page 1

This move away fromrepparttar rigidity of traditional benefits packages comes as no surprise when one considersrepparttar 111733 variety of life circumstances amongrepparttar 111734 Canadian population. Increasingly, family households have both partners working thereby causing a considerable overlap in benefits. With flexible coverage, one partner’s traditional plan is complemented and any gaps inrepparttar 111735 family’s coverage are easily filled. Younger Canadians may find themselves planning for a family and need to think aboutrepparttar 111736 necessity for vision insurance and/or dental insurance. Alternatively, aging individuals may need to secure a variety of previously unneeded benefits, such as disability insurance.

It is predicted that whenrepparttar 111737 baby boomers are ready to retire, a massive job shortage will result. Subsequently, employers may find it challenging to compete for prospective employees. Perhaps it will berepparttar 111738 employer who can appreciaterepparttar 111739 evolving needs of Canadians who will triumph.

Anna Dorbyk is the editor for Canada Health Insurance and is a graduate student in Communication Studies at Concordia University. For more information on health insurance for Canadians please visit www.canada-health-insurance.com.


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