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The IRS will grant an automatic extension to anyone who asks. But you still have to estimate what you owe and send the money.

For taxpayers who can’t manage the April 15 deadline, the Internal Revenue Service offers an automatic six-month filing extension. This year the due date is Oct. 15, and taxpayers qualify by filing Form 4868.

 

Getting an extension is preferable to filing a return with mistakes, says Melissa Labant, a tax specialist with the American Institute of CPAs. “If you have already filed, then you will need to amend the return, which is often more trouble,” she says.

 

Remember that an extension to file isn’t an extension to pay. Uncle Sam wants 100% of the total tax by the April due date, or interest and perhaps a late-payment penalty will be due.

 

Here are common reasons to seek an extension.

 

Incomplete records, especially for investments or a closely held business. A sore point with many tax preparers is that brokers sometimes issue multiple Form 1099s reporting investment tax information.

Lack of a letter confirming a charitable contribution. The law is clear: Taxpayers must have proper notification from a charity before deducting a donation. “Get that letter before you file,” Labant says.

 

Roth IRA reversal. Taxpayers who converted all or part of a regular IRA to a Roth account have until the October due date the following year to undo the conversion, which is taxable. That might be a good idea if assets in the Roth account have fallen in value since the conversion.

 

Roth IRA owners who file in April can amend their returns before Oct. 15 to undo last year’s conversion, but filing for an extension is often the easier route.

 

You are traveling, or it is your busy season. Harried tax preparers often file extensions for their own returns.

 

Compliments of: Martha Small | Austin Portfolio Real Estate | 512.587.0308

Original Article by: MSN Money partner

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Most taxpayers can begin filing their federal income tax returns, and many can file for free through the agency’s Free File program.

Have you filed your 2012 tax return yet? Millions already have filed today.

 

Like racers in the starting blocks, these taxpayers have been poised to send their returns to the Internal Revenue Service for weeks, but had to wait.

 

Because Congress waited until Jan. 1 to approve the American Tax Relief Act, which includes many provisions affecting 2012 tax returns, the IRS needed time to get forms and instructions updated and its computers reprogrammed.

 

The IRS is ready to take returns from most (but not all) taxpayers today. It’s now accepting returns that are filed the old-fashioned way, filled out paper and snail-mailed in, as well as electronic filings.

 

And the tax agency’s Free File option also is open for business.

 

Free File 2013

 

Free File first appeared on the tax-filing scene 10 years ago. Now it is old hat.

 

Sure, there are some tweaks each year. But basically, the filing routine is the same. A group of commercial tax preparation software companies, known as the Free File Alliance, agrees to make a version of their software available to eligible taxpayers via the IRS Free File site.

You can use the IRS Free File program to prepare and file your taxes this year at no cost (just in case you thought the name Free File was just a catchy alliterative title) if your adjusted gross income is $57,000 or less. This income threshold applies to all filing statuses.

 

And you have 15 tax software companies from which to choose. Or you can use the Help Me Find a Free File Company IRS search tool to determine which one best fits your filing needs.

 

Fillable forms for free

 

If you make too much money to qualify for Free File this year, the IRS is once again offering Free Fillable Forms.

 

These are online versions of the most commonly used IRS tax forms. Instead of buying and loading tax software onto your personal computer, you simply open up the forms you need, enter your tax information and e-file the documents at no charge.

 

But since it’s just forms, not software, you get only basic calculations of the data you enter on the forms. You must know what goes where. And you must transfer any amounts to other forms as needed.

 

Still, it is free.

 

So if your return isn’t too complicated, and you’re comfortable filling out the forms, they may be just the ticket this tax season.

 

Happy filing!

 

Compliments of: Martha Small | Austin Portfolio Real Estate | 512.587.0308

Original Article by: MSN Money partner

Click here to view the original article

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