Tick, tock. Uncle Sam's deadline for your 2011 return is looming, and you aren't nearly ready to file? Now could be the time to come up with a backup plan. Fortunately, the Internal Revenue Service has some sympathy for procrastinators: The paperwork for filing an extension is simple, and it will keep the feds off your back all the way until Oct. 15, 2012. In other words, the IRS will give you an automatic six-month extension.
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Now, for some folks, once you've completed the exercise of coming up with an estimate, you might as well just go ahead and file your taxes. But if your taxes are complicated or if you're still waiting for information you need to complete your return, filing for an extension can be a major stress reducer.
Approval of your extension application is automatic, as long as the estimate of your 2011 tax bill is "reasonable." (You'll be OK if your estimate was accurate based on the information you had at the time.) Just keep in mind, you'll be charged interest (currently at a 3% annual rate) on any outstanding balance until you file your return and cough up the remaining part you owe. If your estimate is off, you'll also be charged a 0.5% a month "failure-to-pay" penalty.
If you're still interested in extending, you must notify the IRS that you want an extension by the April 17, 2012, deadline. You can do this by filling out Form 4868 (Application for Automatic Extension of Time To File U.S. Individual Income Tax Return), which you can download from the IRS web site.
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