Filed my Form 4868 this week (extension to file tax return)

[livesoft]

I mailed in our Form 4868 for an automatic extension to file our federal tax return and an extension to file our state tax returns.

The tax returns are already prepared, but my spouse never wants to go over them and there may still be some corrected 1099s that show up.

I never have any worries during tax season. I do wonder why there is a so-called tax season since extensions are easy and free.

I'll even guess that almost all tax preparers file for an extension, too.

Do you think that more than 10% of readers of this forum file for an extension? Or less?

[Wagnerjb]

So, you do extra work because your wife can't be bothered to sign the return before April 15th?

I would bet you that preparing the return on time (with the best data you have at the time) is easier than extending. Think about it. You need to basically do a complete tax return by April 15th to send in a decent estimate of your tax liability. And you have to send in an extension form. If nothing changes, you send in a complete return in October. On the other hand, I will send in my complete tax form with my payment on April 15th. If I get additional information after that date, I file a one-page 1040X. I think filing a one-page 1040X (if necessary) is easier than doing your taxes twice and sending in an additional form in April.

I mailed in our Form 4868 for an automatic extension to file our federal tax return and an extension to file our state tax returns.

State taxes? I thought you lived in Texas?

Best wishes.

[livesoft]

I have income from teaching in other states.

I'm chuckling that you think sending in a Form 4868 is work. I'll assume you are pulling my leg.

[femur]

How do you accurately fill out Part II on page 1 of Form 4868 without doing most of the leg-work of your normal tax return?

Reference: https://www.irs.gov/pub/irs-pdf/f4868.pdf

[livesoft]

I wrote this in my first post of this thread:

The tax returns are already prepared, but ....

[pshonore]

I filed my 4868 thru IRS Direct Pay (and made a payment of tax due at the same time). Very simple and easy. (There's no question they got my "check" either as I can see the withdrawal). I usually file on time but this year I have some Roth re-characterizations I may do between now and 10/15 so I decided to wait and avoid having to do an amendment. And you never know when your broker will send a corrected 1099. But you still have to figure your taxes and have a good faith estimate of where you stand

[JW-Retired]

Does the proverbial late 1099 really happen? I have never asked for an extension because we have yet to receive a late enough corrected 1099 to have needed one. We file around April 1.

The one and only 1040X we ever filed was due to us overlooking a significant deduction, but that never happened again.
JW

[HueyLD]

I had to amend my returns two years ago due to a late "corrected" 1099-DIV.

With all the problems with Vanguard tax reporting forms this year, I think there will be even more corrected 1099-DIVs between now and the rest of the year.

[NotWhoYouThink]

Ours are pretty simple, we've never had a corrected 1099 or anything else that would cause us to have to submit a correction, so it is easier to file now and check it off our list and forget about it. I don't see filing a Form 4698 as being particularly burdensome, but leaving something on my list of things to do that I could have checked off by now would bother me. (Sometimes when I do something not on my list I write it down just to cross it off. Yes, I am NotWhoYouThink and I have a problem.)

So why do you extend instead of filing on time? Is it the late 1099 possibility/probability, or is it that your spouse likes to procrastinate?

On the other hand, when I was cleaning up my tax records for the year to file away, I found a paper copy of a tax credit form from a charity that I didn't know I had. Must have been in a foul mood, because my first thought was "darn, now I have to drive all the way to the bank to get this notarized so I can get a $500 tax credit", instead of "yeah, a $500 tax credit!"

[Epsilon Delta]

Does the proverbial late 1099 really happen? I have never asked for an extension because we have yet to receive a late enough corrected 1099 to have needed one. We file around April 1.

Not to true bogleheads, however if you are an apostate and do market timing, use MLPs and invest in funds with dodgy accountants they very well might.

Not getting late or amended 1099's is one of the advantages of simplicity.

[harmony]

It makes for less stressful relationships to have forgiveness built into our financial/social systems. For some relationships (husband/wife, parent/child, tax preparer/client) filing the extension may work better than adhering to the first tax deadline. Livesoft has pointed out the reasons that make filing for an extension work for them. Some may call this procrastination. More positively speaking though, it may be more efficient use of time and energy, as long as they don't push the October deadline.

Here are a few examples that I think are a wiser allocation of the very valuable resource of time approaching the April deadline:

A college professor may be grading mid-terms in late March, but will have more time to complete taxes after the semester ends. A public school teacher will have much more time in the summer than spring. In both cases students are the "time" beneficiaries.

Anyone who brings their taxes to a professional preparer in late March, could be offered an extension, perhaps for a reduced fee if the preparer knows that he/she will have more time once the tax deadline is passed. The business relationship thrives because frustration can be minimized for the “procrastinating” client. (I was surprised to learn two friends hadn't started in late March.)

A parent who is using tax software to help an adult child complete a tax return may find the deadline comes too soon. Of course, they should speed up communication via email and phone calls, but once the forms are ready to go. there may not be enough time left to accommodate any glitches with US mail. Such a glitch happened between my son and me this tax season. Returns mailed to him on April 1 should have arrived on April 4, but probably didn't fit in his apartment mailbox; so they were returned to me on April 12, too late to count on beating the deadline. He will be filing a state extension this weekend for the first time. He might have had to file a federal extension as well, but he is getting a refund, so no extension is required for that.

If I hadn't been following Livesoft's postings about the value of an extension, I might have tried to get those forms back to my son by buying some expensive Express Mail service, which might still not have fit in his mail box, and would have required him to take time off during his work hours to pick it up from the post office, thus defeating the purpose of the express mailing. Filing an extension is better for our relationship. Livesoft, you've inspired us to live softly and use the graces built into our tax system.

[spectec]

Another good reason for filing an extension is that it extends the time for self-employed individuals to make deposits to their SEP plan (or top it off as the case may be). Same for shareholders in S-corporations, except the corp must have extended back in March. However, the extension does not provide additional time to make deposits into regular IRA's.

Personally, I've always filed extensions for over 40 years, and seldom submit the final return until Sep-Oct. Keeps the pressure off.

[Kevin M]

I help a friend with his taxes, and this year I had him file federal and state extensions, along with payments of the fairly large anticipated tax bills. There was a large mistake on a K-1 he received for a distribution from his deceased dad's trust related to the sale of the dad's home, and the trustee (his sister) refused to do anything about it when we explained the issue to them. So we filed the extensions to give us time to prepare the explanation and discuss it with his sister's CPA after April 18, when she will not be so busy.

First time I've prepared an extension, and it was very easy (using HRBlock software this year). The more time consuming part was dummying up his returns for the worst case scenario, assuming that the CPA won't amend the trust's 1041 and K-1, so he could pay the worst-case tax to avoid interest and penalties.

In California you don't even have to mail a form if you don't owe any state income tax--the extension is automatic with no form required (the form actually states not to mail it if no tax is owed). This is nice, since I have my daughter's state return prepared and waiting for her signature, but since she doesn't own any tax, it won't matter if she doesn't get over here before April 18 to sign it.

Of course my friend did owe tax, so had to file the one-page form for California and mail it with his check.

Kevin

[Kevin M]

A parent who is using tax software to help an adult child complete a tax return may find the deadline comes too soon. <snip> Returns mailed to him on April 1 should have arrived on April 4, but probably didn't fit in his apartment mailbox; so they were returned to me on April 12, too late to count on beating the deadline.

Do you do the returns with pen and paper forms? I use tax software to help people who are remote, but just email the return PDFs for them to print, sign and mail. This eliminates the particular problem you had.

Kevin

[bengal22]

I have never filed an extension and do not foresee filing an extension unless I have some complicated issue that makes hitting the deadline impossible. If I am owed money why would I file an extension? If I owe money filing an extension does not absolve me from paying my tax bill on time(I would pay interest and possible penalty after April 15). Don't get it. Sorry.

[livesoft]

If I am owed money why would I file an extension?

One year, I received a large tax refund after filing an extension. That saved me a lot of money. The reason was that I would've just invested the tax refund in the stock market as soon as I got it. The market dropped a lot and I invested at a better time and didn't lose money from April to September like I would have.

[Leif]

Actually, I'm now filing my returns earlier then in the past. Even though I use a PIN the thought of having someone filing a fraudulent return and getting my refund is pushing me to do it earlier. Now that I'm doing it earlier I find I like that since I have less pressure.

[quantAndHold]

How do you accurately fill out Part II on page 1 of Form 4868 without doing most of the leg-work of your normal tax return?

Reference: https://www.irs.gov/pub/irs-pdf/f4868.pdf

If you've done your withholding and estimated taxes correctly during the year, filing an extension is literally two clicks in TurboTax.

I've filed extensions for one reason or another 3 of the last 5 years. Once because of a complicated marital situation that the IRS didn't issue guidance on until May. Once because of late 1099 and tax guidance from an inherited investment. Once because I was dealing with a family situation and didn't have the time or mental energy to do taxes until summer.

When I was doing my Dad's taxes, I filed an extension every year. It was easier to travel to see him, get the 1099's and such, and do it there where I could ask him questions. His investments were complicated, and he would always get 1099's and K-1's all the way up to the deadline. It was just easier to do it in June or July.

This year I filed on time, and the very next day I got an unexpected K-1 and now have to file an amended return.

[harmony]

A parent who is using tax software to help an adult child complete a tax return may find the deadline comes too soon. <snip> Returns mailed to him on April 1 should have arrived on April 4, but probably didn't fit in his apartment mailbox; so they were returned to me on April 12, too late to count on beating the deadline.

Do you do the returns with pen and paper forms? I use tax software to help people who are remote, but just email the return PDFs for them to print, sign and mail. This eliminates the particular problem you had.

Kevin

That might be a solution if we ever are pushing the October deadline and owe taxes. In our case, we knew we could file an extension for state if there was a mail glitch. Filing the state extension was preferrable over potential identity theft if the email were hacked and his SS# was exposed. The hacker could have seen the federal refund that was due. His U.S. mail wasn't hacked it was just detoured. I'm glad they didn't leave in his apartment hallway, though my son wishes they had. The extension solves it.

[jebmke]

I haven't filed "on time" in years. My returns are ~99% complete, extension filed, balance paid.

I have electronically paid my Q1 estimated taxes as well.

My TaxAide site is open on Monday. I'll probably do ~ 6 returns on Monday for last-minute shoppers.

[Wagnerjb]

I'm chuckling that you think sending in a Form 4868 is work. I'll assume you are pulling my leg.

No, but calculating the estimated liability is work. And since you will do a complete tax return in October, the time you spend on the estimate is wasted time.

[harmony]

If I am owed money why would I file an extension?

One year, I received a large tax refund after filing an extension. That saved me a lot of money. The reason was that I would've just invested the tax refund in the stock market as soon as I got it. The market dropped a lot and I invested at a better time and didn't lose money from April to September like I would have.

Is filing for an extension really a necessary step if you are owed a refund? Wouldn't you have received the refund anyway even if you had filed late (without having filed Form 4868 by the April deadline)?

If you’re due a refund there’s no penalty if you file a late tax return.

https://www.irs.gov/uac/Newsroom/Eight- ... aying-Late

Perhaps the point you are making is the benefit of having gotten the refund later, not the benefit of having filed for an extension. Do you routinely file Form 4868 even if you are getting a federal refund?

In some states Form 4868 activates the state extension, even if no federal tax is due. For the state I am dealing with, only Part I of the form is to be filled out, if no federal tax is due; and they only require the form later, when the state return is finally filed.

Edited to clarify: The state for which we are preparing to file an extension requires US Form 4868 with only Part I filled out. This gets attached to the state return with only name, address and signature areas completed. (I think the state department of revenue told me wrongly, that Form 4868 is to be filed when the return is finally due. That doesn't make sense, so he's going to file for the extension before the due date.) This is too complicated to plan on doing every year, but nice to have when needed.

[jebmke]

I'm chuckling that you think sending in a Form 4868 is work. I'll assume you are pulling my leg.

No, but calculating the estimated liability is work. And since you will do a complete tax return in October, the time you spend on the estimate is wasted time.

No, you prepare a return that is complete or nearly complete and wait for changes to tax forms and/or correct minor errors. In my case, I have a couple minor deductions which I need to check on that will either reduce my tax or make no difference. I also have a rental property that most of the time runs a small loss. I don't draft the Schedule E until summer, typically. If I have some reason to thing the "E" will report a profit I just jam in a number that is safe enough for estimates and then replace it with the E when completed.

Even if I owed a little in September the cost would be minor.

[livesoft]

I routinely file an extension no matter what. I have had these three combinations at time of sending in 4868:

federal refund, owe state
federal owe, owe state
federal refund, zero state liability

I never pay estimated state taxes except with the extension.

@Wagnerjb, I already did a complete tax return. I won't do one in October again unless something happens to change it (like market down 50%, so I will recharacterize some Roth conversions). After my spouse goes over our tax return, I will e-file it.

[Bill M]

Does the proverbial late 1099 really happen? JW

I received a corrected 1099 for 2014 on 10/23/2015. Just past the 10/15 deadline for the extension. Oh well!!

The correction was to reduce the amount of foreign taxes paid; so that increased the US taxes due by the same amount. 1040X. And so for 2015, I filed a 4868 so that the 1040X(2014) can be completely processed before 1040(2015) hits the system. I don't want the $5K refund in I-Bonds to get cancelled because of a $39 amount due for previous year.

[avenger]

I filed an extension... only because my 2012, 2013, 2014 amended returns are still being processed...

[dodecahedron]

I'm chuckling that you think sending in a Form 4868 is work. I'll assume you are pulling my leg.

No, but calculating the estimated liability is work. And since you will do a complete tax return in October, the time you spend on the estimate is wasted time.

Some of us are more or less constantly estimating our tax liability situation (even before the tax year ends) in order to get a handle on our likely marginal tax rate for the year, how much Roth conversion or tax gain harvesting to do, whether to pay deductible expenses in Dec or wait until January, etc. So we may have a very good idea of the overall lay of the land even before we are ready to sign the completely final version of the return.

And you don't have to obsess about getting the estimate exactly right. No big deal about *conservatively* calculating estimated liability for those of us who understand what is going on with our taxes and have some spare cash. The only time in my life when I needed to file an extension for myself was my final joint return with my late husband. There was a huge amount of unusual stuff that year and I was feeling overwhelmed (because his income that arrived after his death went on a 1041 estate income tax return with a different calendar year than the usual one). So I just submitted the 4868 with generous overestimates of my tax liability, figuring that I would sort it all out later.

I wound up getting most of what I had sent in with my 4868 in April back in August when I had finally time to work through everything. Now you might say that was an unnecessary interest free loan to the government, but I efiled with TurboTax and took Intuit's offer to take my refund in the form of Amazon gift cards with 10% bonus.

A 4868 (which can be efiled and is extremely short with minimal data input) and a subsequent 1040 (also efiled) is a piece of cake compared to a timely efiled 1040 followed by an amended 1040X (which can't be efiled and often requires a written explanation of the mistake you are correcting.) If you are getting a significant extra refund on your 1040X, it will take quite a long time because it has to be done by hand (and you can't get a 10% bonus on a refund resulting from an amendment.)

[livesoft]

I'm kinda getting the idea that some folks think that figuring out an estimate is

completing one's entire tax return, but not filing it,
then sending in the Form 4868,
then throwing away the tax return and deleting the tax files and software from one's computer (a most important step!),
then waiting until October,
then completing one's entire tax return from scratch after re-installing the tax software, and filing.

I suppose it could be done that way, but that's not the way I would do it.

[Wagnerjb]

A 4868 (which can be efiled and is extremely short with minimal data input) and a subsequent 1040 (also efiled) is a piece of cake compared to a timely efiled 1040 followed by an amended 1040X (which can't be efiled and often requires a written explanation of the mistake you are correcting.) If you are getting a significant extra refund on your 1040X, it will take quite a long time because it has to be done by hand (and you can't get a 10% bonus on a refund resulting from an amendment.)

If you received a late 1099 every single year, I can see the appeal of doing an automatic extension. But doing extra work for 14 out of 15 years just to avoid a 1040X in an isolated case doesn't make sense to me.

I have done a dozen 1040X returns over the past 30 years (not just for myself, for family members and friends) and I don't consider them intimidating or long. Yes, you may have to type, "corrected 1099 received" on the back but I don't consider that burdensome.

Livesoft - if you are extending in order to manage Roth conversions and recharacterizations, then that is a different issue.

Just my opinion.

[livesoft]

So it appears that readers file more 1040X forms than 4868 forms.

[JW-Retired]

So it appears that readers file more 1040X forms than 4868 forms.

Really? Didn't do a count but I felt the 4868 forms had it.

A couple of late 1099's and I might join the dark side.
JW

[trueblueky]

Does the proverbial late 1099 really happen? I have never asked for an extension because we have yet to receive a late enough corrected 1099 to have needed one. We file around April 1.

The one and only 1040X we ever filed was due to us overlooking a significant deduction, but that never happened again.
JW

I had a VITA client this year who received a letter from his broker correcting his 1099s for 2012, 2013 and 2014. The change for 2012 was favorable, but not worth the effort. The change in 2013 was favorable and worth the effort; he'll amend after tax season. The 2014 change was unfavorable, so needed to be done quickly to stop interest charges.

In that same letter, he received a check covering the years prior to 2012 that are incorrect, but now too old to correct. (Paradox)

So, yes, late 1099s and really late amended 1099s occur.