Filing Tax Extensions

While your tax returns are due by April 15th of the following year, there are options to extend the date by which you must file your return.

• Form 4868 - must be filed by April 15th and will extend your return due date for four months until August 15th. This is an automatic extension and does not require a reason.
• Form 2688 - is used to extend the due date of your returns by an additional two months to October 15th. This form requires that you filed Form 4868 in a timely manner and requires an explanation such as "Additional time is needed to accumulate the information needed to file a complete and accurate return".
• Form 2350 - People on foreign assignments who are waiting to qualify for the Bona fide Residence Test or Physical Presence Test use form 2350. It can extend your due date to as far as January 30th of the 2nd year following your tax year. Example: Tax year is 200C. Form 2350 extends your due date until January 30, 200E, rather than April 15, 200D.

Note: While most filing extensions gives you more time in which to send your return to the government, it does not extend your time to pay your tax liability. It is advisable to make a payment with your 4868 unless you know you are in a refundable position.

While most states will accept the federal extension, many require you to file a copy with them or their own extension forms. Check with a tax advisor for the legal requirements in your state(s).

Warning: Filing an extension but not having your tax liability fully paid up may result in the assessment of Interest and Penalties by the IRS or state taxing authority.

Estimated Tax Payments

Generally speaking, you will be required to make estimated U.S. tax payments if you have any of the following situations:

• Self Employment Income • Substantial passive income

• Substantial capital gains • You are a high net worth taxpayer

An underpayment penalty may be imposed if you have not paid at least:
90% of the current year U.S. tax liability on a quarterly basis; or 100% of the prior years U.S. tax liability on a quarterly basis If your adjusted gross income for the prior year exceeded $150,000 ($75,000 if MFS), then you must pay in at least 110% of your prior year tax liability

Federal estimated tax payments are filed on Form 1040ES and are due by April 15th, June 15th, September 15th, and January 15th of the following year. If the 15th falls on the weekend, then the payment is due on the following Monday.

State estimated tax rules vary. Check with your tax advisor to see whether or not your state follows the Federal rules or has their own.

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