Form 4868 Payment

[Burke]

This may be a dumb question, but if you e-file an extension and there is money to be paid, is there a particular voucher to send with it? Or do you just send a copy of the 4868 form?

[sandigi]

ACH payment via software

This may be a dumb question, but if you e-file an extension and there is money to be paid, is there a particular voucher to send with it? Or do you just send a copy of the 4868 form?

My software (Drake) allows for ACH (Automated Clearing House) payment. Enter routing and account numbers just like you would for an electronic deposit of refund. The date the money comes out of the bank is 04/15 unless specified earlier. I recommend this because then we have an electronic verification that the money was paid.

Or you can send a copy of the F4868 and line 7 put "Amount you are paying" and send in a check. Then go to the post office, stand in line, and mail it certified mail return receipt request. Which will come back without a signature from the IRS . . . and you can hope that you can prove that your check is what was mailed in that "dated" receipt.

[FEDUKE404]

Just mail a check ?

This may be a dumb question, but if you e-file an extension and there is money to be paid, is there a particular voucher to send with it? Or do you just send a copy of the 4868 form?

I've been efiling Form 4868 along with Form 8878 whenever payment is involved. Autodebit on April 15th, receipt of Form 4868 quickly acknowledged, end of story!

Tax software handles the entire thing. . .but does need TP signature(s) on Form 8878.

As for mailing a check, so far as I know you just snail mail the payment (along with copy of efiled 4868? ? ?) to the appropriate address for your location.

FWIW: It might create less potential confusion to efile either BOTH form+payment or to efile NEITHER, using snail mail instead. The actual Form 4868 pretty well states "amount you are paying" so a Form 4868 without a payment might create some IRS confusion whether efiled or snail-mailed.

FE

[JohnH]

A zero on the "Amount You Are Paying" line 7 of a paper 4868 also works quite nicely (even if there's an amount due showing on line 6).

[FEDUKE404]

Why do that ?

A zero on the "Amount You Are Paying" line 7 of a paper 4868 also works quite nicely (even if there's an amount due showing on line 6).

That sounds pretty illogical. . .kinda like sending in a no-payment tax return with a large balance due and then just waiting for the IRS to send you a (moderately increased!) invoice sometime in the future? ?

Do you routinely encourage your clients to face exposure to late payment penalties? ? ?

FE

[David1980]

When in doubt, read the instructions.

"Note. If you e-file Form 4868 and mail a check or money order to the IRS for payment, use a completed paper Form 4868 as a voucher. "

Bottom right of page 3 of PDF. http://www.irs.gov/pub/irs-pdf/f4868.pdf

[FEDUKE404]

Answer for Burke

This may be a dumb question, but if you e-file an extension and there is money to be paid, is there a particular voucher to send with it? Or do you just send a copy of the 4868 form?

Burke -

At least a CLEAR answer from bottom of page 3 of the IRS Form 4868 instructions:

Note. If you e-file Form 4868 and mail a check or money order to the IRS for payment, use a completed paper Form 4868 as a voucher.

That should work. . .

FE

[JohnH]

That sounds pretty illogical. . .kinda like sending in a no-payment tax return with a large balance due and then just waiting for the IRS to send you a (moderately increased!) invoice sometime in the future? ?

Do you routinely encourage your clients to face exposure to late payment penalties? ? ?

FE

I neither encourage nor discourage them form paying late payment penalties. I simply give them their options (ALL of their options), and let them make an intelligent choice given their circumstances.

I strongly encourage them to avoid a Late Filing penalty of 5% per month. But I also explain to them that the late payment penalty plus interest amounts to 3/4 of 1% per month (the equivalent of paying a 9% APR on the unpaid balance). Some choose not to pay that, while for others it's cheaper than any other means they have to borrow the money on short notice.

I find that most of them are perfectly capable of making rational financial decisions when given all the facts, especially if I don't scare the daylights out of them by shouting "PENALTY" when it's really just a way the IRS uses to boost the effective interest rate. As a tax pro I owe them the courtesy of giving them the whole picture. Once I explain that a non-deductible penalty is functionally the same thing as a non-deductible interest charge, they almost always understand that there is no practical difference between them, and that the sum of the two is simply a cost of borrowed money. From that point, it simply becomes a matter of deciding the easiest & least painful way to borrow.

[sandigi]

Great way to explain! Can you help me with 1099R in Drake?

I neither encourage nor discourage them form paying late payment penalties. I simply give them their options (ALL of their options), and let them make an intelligent choice given their circumstances.

I strongly encourage them to avoid a Late Filing penalty of 5% per month. But I also explain to them that the late payment penalty plus interest amounts to 3/4 of 1% per month (the equivalent of paying a 9% APR on the unpaid balance). Some choose not to pay that, while for others it's cheaper than any other means they have to borrow the money on short notice.

I find that most of them are perfectly capable of making rational financial decisions when given all the facts, especially if I don't scare the daylights out of them by shouting "PENALTY" when it's really just a way the IRS uses to boost the effective interest rate. As a tax pro I owe them the courtesy of giving them the whole picture. Once I explain that a non-deductible penalty is functionally the same thing as a non-deductible interest charge, they almost always understand that there is no practical difference between them, and that the sum of the two is simply a cost of borrowed money. From that point, it simply becomes a matter of deciding the easiest & least painful way to borrow.

I like your method of explaining the penalty. It is very clear.

I hope you can help me with another issue. Someone said you use Drake, and I should PM you on a problem I'm having with Roth Distribution. I don't know how to PM, so will try here on the forum. I have 1099R code T. Drake is throwing the $ on F1040 both lines 15a and 16a. What am I doing wrong?

[JohnH]

Are you entering anything on line 2a of the input screen? I think it will carry to 16a if you do that. Assuming the distribution is original funds only (no earnings), then I think the entry on 2a should be -0-. If there are any earnings, they should go on 2a. I haven't done an early Roth withdrawal in several years, but I think the one I did handle was taken from a 1099-R which was incorrectly filled out.

[sandigi]

That did it!

Are you entering anything on line 2a of the input screen? I think it will carry to 16a if you do that. Assuming the distribution is original funds only (no earnings), then I think the entry on 2a should be -0-. If there are any earnings, they should go on 2a. I haven't done an early Roth withdrawal in several years, but I think the one I did handle was taken from a 1099-R which was incorrectly filled out.

Oh, John I appreciate you so much! I've played with that tax return for so long and overriden so much that I knew I had made a mess of it! Yes, I did put -0- on Screen 1099R line 2a and it was being dumped in with the pension $ on form 1040. I just now deleted the -0- and left 2a blank. Wahlah! Magic. It is now only on Form 1040 line 15a IRA distributions.

You are probably very busy and I THANK YOU from the bottom of my heart.

[JohnH]

In the rush we are jumping all over the place on this forum, but also take a look at my reply on the main thread. I gave you some more info on a better way to enter Roth distributions and other special situations in Drake. It might be useful if you find that he had a loss on the Roth IRA, as Burke suggested over on that thread.

[Burke]

When in doubt, read the instructions.
"Note. If you e-file Form 4868 and mail a check or money order to the IRS for payment, use a completed paper Form 4868 as a voucher. "
Bottom right of page 3 of PDF. http://www.irs.gov/pub/irs-pdf/f4868.pdf

Consarn it, I READ those instructions and didn't see it! I told you it was a dumb question. I need a drink.

[Burke]

. I don't know how to PM, so will try here on the forum.

Go to top of the Forum page on the red bar where it says "Welcome, sandigi." Next to it is a black box that says "Notifications." Click on that and a whole new world will open to you. It really should be a little more user-friendly.

[sandigi]

Got it!

Go to top of the Forum page on the red bar where it says "Welcome, sandigi." Next to it is a black box that says "Notifications." Click on that and a whole new world will open to you. It really should be a little more user-friendly.

Thank you, Burke. I clicked and looked and can't wait to explore the new world a bit later.