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Monday, April 14, 2008

Filing for tax extension

As generally happens with us in most years, we again ended up filing for a tax extension. The process was very simple - to file for federal tax extension, just had to file Form 4868. It required us to fill out our estimated tax liability along with the total tax payments (withholdings). Since we had entered most of our information in TaxAct, we had good idea of how much total taxes we had to pay. All our withholding info was also entered in TaxAct, so just pulled those numbers from the software.

We again used TaxAct's website to file for the extension. Since we had already filled out the info on Form 4868, I just went online, opened an account, and using one of their menu options (under Filing, there's File Federal extension), filled out Form 4868 and e-filed the request for free. Since we owed payments to the IRS, I also provided our bank info for automatic debit. We had delayed filing for the extension as we thought that IRS will withdraw the money right away from our bank account, but the software automatically inserted the date of debit as Apr 15, indicating that the date was based on IRS guidelines. Of course, we are in no hurry for the IRS to withdraw the money, so the Apr 15 day worked out just well for us.

For the state taxes, our state automatically grants extension if we file for federal tax extension. However, being a worry wart, I filed for the extension for state anyways. Again, the process was simple - in this case, I just went to our state's tax site and filed for the extension. The entire process of filing for federal and state tax extensions online took under 10 minutes, so it was a pretty quick process.

While the extension buys us time till Oct 15, 2008 which is the last day to file the 2007 taxes, one disadvantage is that it will also delay the stimulas checks that are supposed to go in May since one of the requirement to get the these checks is that a person must file the taxes. Hopefully, we will be able to file the taxes much before Oct 15th, so won't have to wait till that time to get the stimulas checks.

posted by Ruby @ 11:03 PM

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