It’s April 14th, which means, its tax time. Hopefully, you’ve already filed your tax return. However, if you haven’t, and won’t have it done in time, you’re not fully out of luck. Both the IRS (federal) and (in Massachusetts) the Department of Revenue do allow taxpayers to file for an automatic, six-month extension to file their tax return. But, if you choose this route, there are a few things you should keep in mind.
Most importantly, both the federal and state extensions give you an automatic additional six months to file your tax return. They do not, however, give you any additional time to pay any taxes you still owe. Accordingly, if you owe (or think you owe) additional taxes for last tax year, the exact amount, if you know it, or, if you don’t, your best, good faith estimate of how much additional tax you owe should be sent along with your request for an extension to file your return. If you don’t, the IRS, DOR (or, depending on who and what you owe, both) will levy interest and, in some cases, penalties on the amount owed until that amount is paid.
Some additional points to keep in mind. In many cases, you can contribute monies to certain retirement plans – for example, a Roth IRA – for last tax year up until the time you file your final tax return. So, for example, if you qualified for a Roth IRA in 2007, but won’t have the monies to fund a Roth IRA (for tax year 2007) for another month or two, it would likely be in your best interest to file for an extension to file you return (paying, of course, any additional taxes owed) wait the month or two until you have the money, set up and fund a Roth IRA for 2007, and then file your final 2007 federal and state tax returns.
As for the extension forms themselves (and instructions for using and filing them) the federal extension with instructions (Form 4868) is available at the IRS website www.irs.gov/ , while the Massachusetts state extension form (Form M-4868, and instructions) is available at the DOR website www.taxsites.com/state.html#links .
Finally, remember that all tax related issues can be both complicated and confusing. Accordingly, if you have any questions or concerns regarding filing an extension to file your tax return (or, questions or concerns about any other tax related matter), it’s always best to seek and take the advice of an experienced CPA or tax attorney.