Simple Question -

[Unregistered]

Fed extension - 4868.

Do I need to file eventhough I do not owe any money or expecting refund?

And the answer is ________

[OldJack]

No but....If you are not filing your tax return before the deadline it is a good policy to file for the extension as when you get around to filing you may discover that you indeed owe the IRS and the 5% per month penalty and ±½% per month interest on any tax owed could hurt. You have nothing to lose by filing the extension.

[Koss]

Late Filing Penalty

It is absolutely correct that if you have a refund there is generally no penalty for filing the return late, even if you did not file for an extension.

There are two major caveats to this.

(1) If you are really unable to complete your federal return, you may not know what your state tax liability is. Some states have a totally Orwellian extension policy. If you don't owe, there is no state extension form. The only way to file an extension is by making an estimated payment. If you owe and you didn't file the return or make a payment, then you get penalized. But the states that use this crazy system will honor a federal extension. If there is any possibility that you will owe state tax, even if it is only $32, you need to either file a federal extension or make a state estimated payment. If you don't do either, and then you owe the state, there are some states that will impose an automatic $50 late filing penalty even if the balance due is six dollars. And a tax pro could end up eating this penalty or facing disciplinary action under Cir. 230 or the state accountancy board. A tax pro should never advise a client that they don't need to file an extension just because they know they're getting a federal refund.

(2) If you are a tax pro, your EFIN can be suspended if you file your own federal tax return late without an extension, even if you get a refund. And this has actually happened to some guys. It's not hypothetical.

Having your EFIN registered to an LLC or some other entity won't help. They look at the filing record of the partners and officers of the entity. Don't have an EFIN? Certification is coming down the pike. Give it a few more years. You won't be able to sign a return unless you are certified, and filing your own return late without an extension will result in suspension of your PTIN.

Current regs already prohibit anyone with an EFIN from knowingly employing or associating with anyone who has been suspended from the electronic filing program or suspended from practice under Cir. 230.

Tax pros are held to a higher standard.

Burton

[Unregistered]

Thank you all.

[Bill Tubbs]

State considerations

Check you state. Here is Wisconsin I just found out that there is a late filing fee even if you're getting a refund. So, that late filing fee can be avoided by filing an extension.

Bill

[Gretel]

Burton, as always, thanks so much for your extended essay. I wonder were you get all the time to spend so much effort in educating us. Maybe you own one of these advices, which let you speak into the computer and the computer writes it?

I wasn't aware at all of the state implications, never had a client who owed to state and filed an extention.

Thanks so much.

Gabriele