Requested a Federal Tax Extension? October 15th is Just Around the Corner

Just a reminder to taxpayers who requested an extension for the 2009 tax year - the October 15th due date is just around the corner. It’s also a crucial due date for thousands of small nonprofit organizations at risk of losing their tax-exempt status because they have not filed the required forms in the last three years, the Internal Revenue Service pointed out in a statement.

“The October 15 deadline is particularly important this year because it’s the last chance for many small charities to comply with the law under the one-time relief program the IRS announced in July,” said IRS Commissioner Doug Shulman.

Small nonprofit organizations at risk of losing their tax-exempt status because they failed to file the required returns for 2007, 2008 and 2009 can preserve their status by filing returns by October 15 under the one-time relief program.

And as always, the October 15th due date is a big day for taxpayers who filed form 4868 to request a six-month extension for their tax returns. The IRS expects to receive up to 10 million returns from taxpayers who requested extensions this year. Some taxpayers can wait until after October 15 to file, including those serving in Iraq, Afghanistan or other combat zone localities and people affected by recent natural disasters.

While filing an extension buys times to complete the details on the return, it doesn’t get the taxpayer out of paying their estimated tax bill by the April 15th deadline. If the taxpayer owes a penalty or interest charges due to underpayment or late payment and they don’t include it in their payment, they can expect the IRS to send a bill for any amount due in the near future.

The IRS encourages taxpayers to e-file; e-filed returns have fewer errors, and e-filed are processed quicker than paper returns - meaning the taxpayer gets their refund faster than if they filed a paper return. October 15th is the last day to take advantage of e-file and Free File for the 2009 tax year. To be considered on time, the mailed paper return must be postmarked by the due date and electronically filed returns must be sent by midnight on the due date.

And as we are nearing the end of the 2010 tax year, the IRS also encourages taxpayers to double check their federal withholding to be sure enough taxes are being taken from their paychecks.

“Now is a good time to make sure your employer is withholding the proper amount,” Shulman said. If you face a shortfall in your federal withholding, there is still time left in the year to make up the difference.”

The average refund for 2009 was $2,887, up 8% from 2008. Even though the Making Work Pay Tax Credit lowered tax withholding rates in 2009 and 2010 for millions of American households, some workers and retirees still need to take steps to be sure enough tax is being taken out of their checks, the IRS said.

The IRS withholding calculator on IRS.gov can help a taxpayer compute the proper tax withholding. Taxpayers who find they need to have additional taxes withheld should fill out a new W4 for their employer to make the adjustment.



Source:
Internal Revenue Service