Procrastinators (Including Yours Truly) Rejoice: IRS Automatic Extension Will Be for 6 Months
When someone extends their federal income tax return next year, it will typically be for six months:
WASHINGTON — Taxpayers will be able to request an automatic, six-month tax-filing extension for most common individual and business returns under regulations released today by the Treasury Department and the Internal Revenue Service.
The new regulations provide streamlined and simplified procedures that are expected to save taxpayers between $73 million and $94 million, annually, by eliminating or consolidating several existing IRS forms. As a result, Beginning Jan. 1, 2006, most individuals and businesses will be able to request a full six-month tax-filing extension, without a reason or even a signature.
The new procedures will replace the existing two-step process under which noncorporate taxpayers could only get a six-month extension by first obtaining an extension, usually automatic, for part of that period and then requesting a discretionary extension for the remainder. A tax-filing extension does not extend the tax-payment deadline.
“Some taxpayers need a full six months for extensions as the law provides. This change simplifies the process so they can make the request just once, not twice,†said IRS Commissioner Mark W. Everson.
Beginning with 2005 returns due in 2006, individuals will be able to use a single IRS form (Form 4868) to get an automatic six-month extension of time to file. This will replace the existing two-step process under which an automatic extension was only allowed for four months, generally until Aug. 15. If more time was needed, a taxpayer had to explain why, using a second extension request form (Form 2688). About 6% of individual taxpayers request the initial four-month extension, and about a third of those go on to request a second extension, usually for two months until October 15. Form 2688 will be eliminated.
Requesting an extension is an especially good idea if you want to make a retirement account contribution for the previous year but don’t have the full amount of the desired contribution on April 15–which is my typical reason for extending.
