Tax Tip Tuesday, #8

In an effort to help make tax season a little less stressful for you, we wanted to share these tips from Turbo Tax with you. You can read previous tips here.

8. File and pay on time

If you can’t finish your return on time, make sure you file Form 4868 by April 15, 2013. Form 4868 gives you a six-month extension of the filing deadline until October 15, 2013. On the form, you need to make a reasonable estimate of your tax liability for 2012 and pay any balance due with your request.

Requesting an extension in a timely manner is especially important if you end up owing tax to the IRS. If you file and pay late, the IRS can slap you with a late-filing penalty of 4.5 percent per month of the tax owed and a late-payment penalty of 0.5 percent a month of the tax due. The maximum late filing penalty is 22.5 percent and the late-payment penalty tops out at 25 percent. By filing Form 4868, you stop the clock running on the costly late-filing penalty.

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