Tax extension: Do you need one?

Published On: Apr 16 2012 06:19:03 AM EDT
JACKSONVILLE, Fla. -

If you need to file a tax extension, the first piece of advice may be the most important.  Tax pros say make sure your extension is stamped by midnight April 17 or you will be considered late and you could face penalties.

We turned to H&R Block to get additional details for those of you who need more time.

Anyone can file an extension, but if you know that you're going to owe the IRS money, there is a huge misconception.  A tax extension is not an extension of time to pay if you owe money.  You still have to pay on time.

"When you file an extension, taxes are due with the extension. So you do still kind of have to have some idea if you owe or have a balance due.  And if you do, then the tax is due with the extension," explains Cherie Roberts, the manager of H&R Block in Mandarin.

So what happens if you can't pay?  That's a problem a lot of people are facing and tax experts say you do have options.

" We advise clients to pay what they can and then there's an installment agreement and you can set up a payment plan with the IRS," says Roberts.

The downsides about setting up a payment plan is you will have to pay interest.   Also, the  IRS usually wants the money within a year, so you will likely have your balance separated into 12 payments.

Dowload Form 4868: Application for Automatic Extension of Time To File U.S. Individual Income Tax Return

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