Tax filing extension possible but penalty, interest rules for paying late
By Joel Stottrup
Yes, you can file your federal and state tax returns beyond this year’s April 17, 2012 deadline. However, you must file an application to the IRS by April 17 to get a six month federal filing extension to Oct. 15, 2012.
You don’t have to apply for a Minnesota filing extension, you just have to get your income tax filing done by Oct. 15 this year, according to the Minnesota Department of Revenue. If you do not meet these state and federal extended filing rules, you face a filing penalty.
Taxes still due on time
However, and this is important: A filing extension does not mean you can delay paying any due state or federal taxes beyond April 17 without penalty, according to the state revenue department, and IRS regional spokesperson Carrie Resch.
The advice from Resch and the state website is to pay as much as you can of your tax liability by April 17 to avoid a penalty. “Generally, most taxpayers will avoid this penalty if they paid at least 90 percent of the current year (2011 in this case), or 100 percent of the tax shown on the return for the prior year, whichever is smaller,” Resch said.
To apply for the filing extension federally, fill out and send in form 4868 either electronically or by mail by April 17. While some post offices remain open until midnight for the regular filing date, don’t count on it. Check with your post office to be safe or just don’t wait that long.
One last note: income tax is a pay-as-you-go system, notes Resch, and that also applies to the state revenue system. Check with the Minnesota Department of Revenue and IRS.Gov websites or a tax accountant to determine the minimum state and federal taxes you should be paying in quarterly throughout the year. If you are employed and income taxes are being withheld in the proper amounts from your paychecks during the year, then you should be fine.
If a taxpayer gets in a financial bind due to a hardship and has difficulty paying taxes due, Resch adds, contact the IRS “and we will work with you. Other options are available to satisfy a balance due such as requesting an installment agreement.”