This year, federal tax returns are due April 17, not April 15. Even with the extra two days, you may not be able to file your return by the due date. If you’re in that situation, don’t panic.
You can get an automatic six-month extension of time to file. To do so, file Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return, by April 17. You can use a paper form or file electronically at websites such as filelater.com.
Remember, you are requesting a filing extension, not a payment extension. When you file Form 4868, you’ll be asked to pay any tax you’ll owe with the return. Even if you don’t have an exact number, you’re supposed to estimate how much you’ll owe and send it to the IRS.
If you don’t submit a request for an filing extension, you’ll owe a penalty of 5% of the tax due on your return for each month that it’s late, up to a maximum penalty of 25%. If you do file an extension request, you may still owe that 5%-per-month penalty. To avoid this late payment penalty, by April 17 you must pay at least 90% percent of what you owe for 2011 or 100% of what you paid in tax in 2010. (If your 2010 income was over $150,000, you need to pay at least 110% of the amount you paid to avoid this penalty.)
