4-13-07
Last Chance to Do It Right
Just about everyone who attended college has, at some point, not finished an assignment by the due date. Maybe you were so deeply engrossed in the topic that you needed more time to explore all of its implications. More likely, you partied too hard, or were hopelessly disorganized, or just plain forgot when the paper was due.
You then had only two options. You could blow it off, or you could ask your professor for extra time. Blowing it off, of course, has nasty consequences: an F in the course, screaming anger or passive-aggressive guilt trips from your parents, possibly losing financial aid, or – if you had often done this before – being tossed out of school.
So you take the other path, and ask your professor for more time. Being in theatre, you probably spent time rehearsing the approach. Will it be sheepish? Cheeky? Confident?
As a former college instructor, and the son of a university professor, I can reveal an academic secret. You were going to get the extension just for asking. Whatever story you presented does not matter, because we would not believe you anyway. You have no idea how many grandmothers die when term papers are due, or right before final exams.
You are out of school now, so you no longer have to write term papers. But you do have the financial equivalent: your income taxes. In case you haven’t noticed, they are due in a very few days. If they are not both just about complete and also showing results that make sense, then you need an extension.
Automatic Response
The Internal Revenue Service is much like your college professors. You want an extension of time to file? All you have to do is ask, and it is automatically yours. They do not care what your reason is. They do not even want to hear it.
The request for an extension (form 4868) is idiotically simple, and requires only a few bits of information. Most you know without looking, like your name, address and Social Security number.
Then there are three figures. The first is how much you think your taxes will be for the year. Any faintly reasonable figure will do, as nobody ever looks at this number again. The second is how much you have already paid towards those taxes, through withholding or quarterly estimated tax payments. I always prefer that this number be accurate, or very close to it, but it too is a figure that nobody will ever look at again.
The third figure, though, requires some thought. How much money are you going to pay with the extension? This is the reason you might put a bit of care into the first two, so that you have some idea how much you actually owe.
This is important. You get an extension of time to file the return, not to pay the taxes. If the taxes are not fully paid by the original due date, the clock starts running on late payment penalties and interest. So you want to pay what you can. (And if you can’t pay, see my last column about alternatives.)
Please Don’t
What you do not want to do – ever – is throw together a crude mess of a tax return at the last minute and mail it in to meet the deadline. You would not have turned in a rough, first draft of that term paper, would you?
I can almost guarantee that if you do slop something together at the last minute, it will be wrong, and wrong in ways that attract attention from the IRS. You do not want that.
Looking for professional help at the last minute won’t get you anywhere either, except perhaps into a different kind of trouble. With the deadline only a few days off, my schedule is full. So, I am sure, is that of every other quality professional. Anyone who says, “Sure, come on in the day taxes are due,” is probably not someone you want to use.
So Just Do It
You can download the federal extension request (form 4868) from the IRS’s Web site at www.irs.gov/pub/irspdf/f4868.pdf. You can also file it electronically there.
Do not forget about your state(s). Most states only require you to send in an extension form if you are making a payment, and those forms are just a simple payment transmittal: name, address, Social Security number and how much you are paying,
There are nine exceptions. Alabama, Connecticut, Massachusetts, Mississippi, North Carolina, Tennessee, Vermont and the District of Columbia require you to submit their own forms to get an extension. New York, as is so often the case, goes its own way. You can send them either a copy of your federal extension or New York’s own form. Again, these forms can readily be downloaded from the states’ Web sites.
Just be sure that anything you mail is postmarked on or before the due date.
And Exactly When Is It Due?
Observant readers will have noticed that I have carefully avoided using “April 15” as a synonym for the income tax due date in this particular column.
Whenever a tax filing deadline falls on a Saturday, Sunday or holiday, it is automatically postponed to the next business day. Today being Friday the 13th, April 15 falls on Sunday. The deadline is automatically pushed to Monday, the 16th. Or so we all thought.
We were all wrong. The IRS observes local holidays. Patriots Day in Massachusetts falls on the third Monday in April, so those who are required to file with the Andover, Massachusetts IRS center would get an extra day this year.
Then, in February of this year – after all the forms had been printed – someone noticed that April 16 had become a legal holiday in the District of Columbia in 2002. (Emancipation Day, if you care, commemorating Lincoln’s signing of the Emancipation Proclamation.) Because the IRS’ headquarters are in the District of Columbia, IRS offices all over the country must conform.
So Tuesday, April 17 it is. When this was first announced, there was some question about whether states would also change from the 16th to the 17th. So far as I can tell, they all have.
Free Offer
If you would like a copy of my free “Checklist of Potentially Deductible Items” for those in the arts, just write, call or e-mail my office. We’ll be pleased to send you one.
Are there money or tax questions you would like to see discussed in this column? Let me know, at 2835 N. Sheffield, Suite 311, Chicago, IL 60657, or call 773/525-1778 (888/525-1778 toll-free outside the Chicago area) or e-mail greg@gregmermel.com.
Greg Mermel is a certified public accountant whose clients in the arts range from individual performers to major theatre companies and suppliers. He has also been known to produce theatre.