Running out of time to file taxes? Read this

With just two days until the April 17 tax deadline, the Internal Revenue Service reminds anyone running out of time that they can easily get an automatic six-month tax-filing extension. And, the easiest and quickest way to get an extension is online through the Free File link on IRS.gov.

In a matter of minutes, anyone, regardless of income, can use this free service to electronically request an automatic extension using Form 4868 . Filing this form gives taxpayers until Oct. 15 to file a return. This is an extension of time to file; not an extension of time to pay.

In Minnesota, about 143,600 taxpayers are expected to request an extension of time to file their tax return.

“Typically, we see around 25 to 30 percent of returns filed in the remaining weeks of the filing season,” said Carrie Resch, IRS spokesperson. “An extension can offer valuable breathing room if you can't make the deadline and it also helps filers avoid common mistakes that happen when people are rushed.”

When time is running short, another way to avoid common mistakes and still meet the deadline is to consider e-filing.

“Filing your return electronically is a great option precisely because it is so fast, easy and secure. It’s also far more accurate than filing on paper. You can e-file for free with brand name tax software by using the same Free File link at IRS.gov that allows a person to file an extension,” said Resch.

To get the extra time to file, taxpayers must estimate their tax liability on Form 4868 and should pay any amount due by the April 17 deadline. Taxpayers can e-pay what they owe using the Electronic Federal Tax Payment System (EFTPS), by electronic funds withdrawal or with a credit or debit card . Those who pay by check or money order should make the payment to the “United States Treasury.”

By filing a return or properly filing Form 4868, a taxpayer will avoid the late-filing penalty, normally five percent per month based on the unpaid balance, which applies to returns filed after the deadline. In addition, any payment made with an extension request will reduce or eliminate interest and late-payment penalties that apply to payments made after April 17. The current interest rate is three percent per year, compounded daily, and the late-payment penalty is normally 0.5 percent per month. The maximum rate for both penalties is 25 percent.

Besides Free File, taxpayers can choose to request an extension through a paid tax preparer, using tax-preparation software or by filing a paper Form 4868, available on IRS.gov. Of the 10.5 million extension forms received by the IRS last year, about 4 million were filed electronically.

Some taxpayers get more time to file without having to ask for it:

· Members of the military on duty outside the U.S., as well as U.S. citizens and resident aliens living and working abroad have until June 15 to file and pay, though interest still applies to payments made after April 17.

· Members of the military and others serving in Iraq, Afghanistan or other combat zone localities can typically wait until at least 180 days after they leave the combat zone to both file returns and pay any taxes due.

Some taxpayers may also get additional time to pay without penalties through the IRS's expanded Fresh Start Initiative. This includes some people who were unemployed in 2011 or 2012 and self-employed individuals whose business income dropped. For details on this penalty relief, visit IRS.gov, keyword "Fresh Start."

Details on all filing and payment options are on IRS.gov.

Tags: news, updates, taxes, irs