Extension w/ installment agreement

[oceanlovin'ea]

Client is waiting for stock information so I will file an extension for her. She owes IRS and NY state.

If I file the Federal extension electronically, does she just mail in the installment agreement form? Do I do the same for the state?

Thank you.

Linda F

[JG EA]

If owes

If the client is going to pay with the extension, then I just have them mail in the extension with the check. Same with the state. perhaps you just want to make sure the IRS got the extension? Then I don't see any harm in efiling it and including it with the check. If they just send the check by itself it may be confusing. In either case have them write SS# 2005 Form # on the check.

Then the 1st quarter for 2006 is also due. It is always a challange to figure that out when the return is not done.

[Jesse]

My software states NOT to mail Form 4868 if efiled - mail check only w/ "2005 Form 4868" and SS# on check - along w/ name address and telephone #.

I was watching Fox news this AM and they had some tax expert giving last minute tips - she said if you do not pay your estimated tax w/ the extension you will still be assessed late filing, underpayment penalties and interst.

My understanding is that you will not be assessed the late filing fees if you file an extension w/out payment. Anyone else know otherwise?

[Bird Legs]

Extension-late filing penalty

If the extension is timely filed with the estimated liability reported, then NO late filing penalties will apply.

[Matt Sova]

Late penalties

If an extension is filed, even without payment of taxes and you owe, late FILING penalties will NOT be assessed. You will however be assessed late PAYMENT penalties. The difference is late filing is 5%/month up to 25% of the tax still owing. Late payment is 1/2% per month. Substantially lower.