Know the Rules of Tax Extensions or IRS May Rule Against You

Mainstreet.com

With the tax deadline day of April 15 approaching fast, you might be thinking "delay, delay, delay," and that's no crime — unless you don't let the IRS know you plan on filing for an extension. If you do plan on filing taxes late, you're not alone. About 8% of all tax filings — about 11 million taxpayers — are filed after April 15. But don't do it unless you know the rules, so Uncle Sam doesn't come knocking with a big tax bill in hand. When you do provide your debt obligation, go big, says Alan Strauss, a tax professional and former chairman of the New York State Society of Certified Public Accountants. "Be sure to overestimate your expected tax liability — even if you cannot pay that amount now. Don't worry about what you can pay; show your liability to be what you really think it will be after some conservative calculating. If it turns out you owe less than you thought,  nothing happens. If you owe more than you report, you could be liable for either a 'failure to file' penalty or a 'failure to pay' penalty or both."