Done !

[AZ-Tax]

I e-filed my last return and I was planning on taking at least day off but I have extension clients coming in tomorrow. At least I can take the rest of evening off.

[Gary]

Retired

I am once again retired for 8-1/2 months. Tomorrow, I go to the gym and get a haircut.

Gary

[fliszt]

Welcome

to the group of done'rs. Doesn't it feel great. Now you can take your time and breathe.
Hope you have a very relaxing summer and fall.

Hey Gary, I usually go to the gym to workout -- not get a haircut.

[Girard Van De Lay]

Finished ne extensions

The stimilius money brought in all of my people early so no extensions this year. That is good for me because we have a new one on the way this summer so one last vacation then feedings at 2AM.

Girard Van de Lay

Maybe a haircut also!!!

[JoshinNC]

I'm exactly the opposite

I've never filed more extensions than this year (30+). I'll be doing returns until mid June. At least that will keep the money coming for a couple more months!

[ChEAr$]

done done

My policy is always no extensions if there's any way. For example if someone usually gets a
refund and nothing's changed this year, but they call on 4/15 for an extension, I gently tell them
it don't really matter.
Similarly if they always owe big bucks and haven't paid a nickel in estimates, an extension is
no good anyway, since IRS will assess non filing penalties.

But I had two this year. One older fellow couldn't find his "stuff"; he couldn't even find the IRS
forms to bring to me so I could fill them in for him! Yeah, I know. (grin

The other one though, is because wife is waiting for hubby to die before she wants to be
bothered will filing a return.

[oceanlovin'ea]

Somewhat finished

I finished 2 today that were left over. I filed extensions so that I could get them finished. I have 3 more here to finish with extensions filed. Have several extensions that won't come in until later in summer.

Then quarterly reports and bookkeeping to catch up on. But that seems like nothing right now.

I took a catnap this noon and another one around 5:30. That was nice. And the phone didn't ring off the hook today. YEA!!!!!!!

It does feel good to have this season over.

Linda F

[JohnH]

My policy is always no extensions if there's any way. For example if someone usually gets a
refund and nothing's changed this year, but they call on 4/15 for an extension, I gently tell them
it don't really matter.
Similarly if they always owe big bucks and haven't paid a nickel in estimates, an extension is
no good anyway, since IRS will assess non filing penalties.

But I had two this year. One older fellow couldn't find his "stuff"; he couldn't even find the IRS
forms to bring to me so I could fill them in for him! Yeah, I know. (grin

The other one though, is because wife is waiting for hubby to die before she wants to be
bothered will filing a return.

Harlan: It's a little late for me to bring this up, but I need to challenge you on one point. Someone who owes big bucks and hasn't paid a nickel in estimates will benefit greatly from filing an extension. I had one last year that owed about $9K and hadn't paid anything. That's what the 4868 showed - $9K due, nothing paid or withheld, and zero paid with the extension. The extension was valid and proper.

When the return was filed in Oct, he was charged FTP penalty and interest at about 1.25% per month, plus estimated tax penalty averaged out to Apr 15 and then continuing at a rate of about .75% per month . But they didn't hit him for the 5% per month FTF penalty. The extension saved him $450 per month x 6 months, or about $2,700. (Actually, the savings was slightly less because there's an offset when the FTF penalty maxes out, so I calculated the real savings at about $2500. Still nothing to sneeze at). He's on a payment plan now, but he will pay it off $2,500 quicker thanks to the properly-filed extension.

[S T]

I always

I always file extensions, regardless of whether it seems like the taxpayer owes or has a refund. If the taxpayer can't pay what I have estimated to be due, I note and file the extension form accordingly. Tax Liability "x" payment due amount "-0-".

Filing the extension form hopefully will protect the t/p from late filing penalties. Late payment and underpayment penalties are another issue.

Sandy

[David1980]

Even if it doesn't look like they owe taxes at the deadline there can be things that would actually cause them to owe. Say you do their taxes in April but they're waiting for some document or something. So you can't file by 4/15, but they don't owe taxes. Since they don't owe anything you decide not to file 4868.

In June they discover they received another 1099-MISC for $20,000 that they forgot about. Now they owe. Would have been a better idea to have filed the extension, and at least get them out of the late filing penalties.

[ChEAr$]

Thanks

Harlan: It's a little late for me to bring this up, but I need to challenge you on one point. Someone who owes big bucks and hasn't paid a nickel in estimates will benefit greatly from filing an extension. I had one last year that owed about $9K and hadn't paid anything. That's what the 4868 showed - $9K due, nothing paid or withheld, and zero paid with the extension. The extension was valid and proper.

When the return was filed in Oct, he was charged FTP penalty and interest at about 1.25% per month, plus estimated tax penalty averaged out to Apr 15 and then continuing at a rate of about .75% per month . But they didn't hit him for the 5% per month FTF penalty. The extension saved him $450 per month x 6 months, or about $2,700. (Actually, the savings was slightly less because there's an offset when the FTF penalty maxes out, so I calculated the real savings at about $2500. Still nothing to sneeze at). He's on a payment plan now, but he will pay it off $2,500 quicker thanks to the properly-filed extension.

for the story. Perhaps IRS has changed their tune a bit, but that was always their stance
before, i.e. less than 90% paid in and the 5 months failure to file applied.

Now then, where can I look for this?

hmmmm.....

[myerstaxes]

Take if from a former Revenue Agent

When I used to audit taxpayers, and there was a deficiency due to the audit, the penalties are always retroactive back to the due date of the return...The IRS transcripts show whether an extension was filed and if none was filed and they filed late, the FTF penalty would be calculated as a part of the balance due...Therefore, as a tax preparer now, I always file extensions no matter what the circumstances...It is never known what may pop up within the next 3 years...Just my experience from within...

[JohnH]

for the story. Perhaps IRS has changed their tune a bit, but that was always their stance
before, i.e. less than 90% paid in and the 5 months failure to file applied.

Now then, where can I look for this?

hmmmm.....

You're right - many moons ago the 90% rule was in effect. So lots of people who owed just threw up their hands and didn't file at all. But then IRS wised up and decided that it was better to entice the T/P into filing an extension even if they can't pay the tax due, because that enables IRS to know the /P is out there and likely owe them money . That's when they added Line 7 to the 4868. If they were not willing to accept an extension with a short payment, there would be no reason for this line on the 4868. Next time I'm in my office I'll look it up and tell you the year this actually changed.

Anyhow, if you read the 4868 instructions you'll see that they clearly say to file the extension even if you can't pay it all, and the extension will be valid. People run into problems when they don't furnish a reasonable estimate of the amount of tax due, but they have no problem if they short pay or don't pay.

I think the IRS is actually very savy in the way they handle this now. They say "an extension of time to file isn't an extension of time to pay", and they structure the penalty situation in a slightly confusing manner, but the fact is that an extension of time to file is an extension of time to pay - it simply adds a charge of about 14% APR to the balance due. But by holding the threat of an additional 5% per month penalty over the taxpayers' heads, they gently ease them into the system even when they can't pay up. I'll bet that subtle move has significantly enhanced collections over the years.

As for the practical side of all this, it doesn't get any better than hearing Benita's experience. After all, she's "been there / done that".

[ChEAr$]

Thank you so much, John

For a moment I thought my wife was right.
And that I was getting a tad forgetful.

Sometime however in last ten years I did send in extension showing the estimated tax due
of some $8,000 together with a form 9465!
And they processed the latter.

So I can see the wisdom indeed of filing the extension if warranted. However i will still do what
I can to discourage extensions, especially when I know for a fact client has all the data necessary
and even though it's April 14th. After all, I can always do just one more.
Happy hour might have to wait 30 minutes on April 15th, but all in all, D DAY is so much better
and lighter than ever before.
I even went home about 4 pm Tuesday.

[JohnH]

I looked it up. Just out of curiosity I was wondering when the extension policy changed. The pivotal year was 1993..

Up until 1992, the 4868 stated that you must pay the amount due in full in order for the extension to be valid. However, beginning in 1993 & 1994 the wording was changed to leave it unclear about whether or not a partial payment was acceptable.

Beginning in 1995, the 4868 had a line to show the amount you extimated that you owed and then a second line to show the amount you were paying. There would have been no reason for the separate payment line if a partial payment would have invalidated the extension. I assume the policy changed at that same time.