This year, millions of Americans will sweat over doing our taxes during the final week before the April 18th deadline. Trying to find all of the paperwork, digging up and organizing charitable contributions, and searching for extra deductions takes time. What many are not aware of is that there is actually no need to hurry. You can get an extension on filing your taxes simply by utilizing one of many available options. The IRS will grant a six-month filing extension (to October 17, 2011) to just about any taxpayer who requests one by April 18, 2011.

Does That Mean I Get Extra Time To Write The Check For My Tax Bill?

Unfortunately, no. Otherwise, this would surely be a more popular option. The extension is only to prolong actually filing your taxes, not to paying them later. If you owe taxes, you will need to do at least a rough estimation of how much you are going to owe and then send that in. The amount you send must be at least 90% of what your final tax bill or you may owe the failure to pay penalty, but this penalty is significantly less than the late fees for not filing. The failure to pay penalty is 0.5 percent of the unpaid money for each month that you are late paying. If you were to not pay and not file the penalty would be 5% a month (25% maximum). Filing an extension gives you extra time to file your taxes and avoid the higher penalty. Of course, if you have a refund waiting, you cannot receive that refund until you file. If you incorrectly estimate the amount that you owe and send in too much money, you will be able to get the extra back when you file.

How Do I Get An Extension?

There are two basic options for getting an extension: you can either file the request form (4868: Application for Automatic Extension of Time To File U.S. Individual Income Tax Return) electronically or by mail, or you can simply send the IRS the amount of money that you estimate to owe them (using a credit card or debit card). Form 4868 has a worksheet to figure out what you owe and provides additional information.

File Electronically

Many tax programs include this extension form, so if you have already started your taxes with a tax program, you might be able to file through that program. Or, if your income is $58,000 or less, you can use the IRS’ Free File website. The service is free and very easy to use. (How to file taxes for free)

If you do not qualify to use Free File, be sure to only use a trusted and established tax program to file your extension; while this is one of the most simple forms that the IRS provides, there are many “services” on the web that will charge you a lot of money to file it for you, and it may not even go through at all.

File By Mail

The IRS will accept printed copies of IRS form 4868 through the mail. Make sure that the form is filled out completely and accurately. This includes double checking your Social Security number (and your spouse’s, if you file as “married filing jointly”) and make sure that your name is readable if completing it by hand. You must take these precautions because if your form is rejected for any reason, however minor, you will owe significant penalties on your now-late payments. If you have any tax due, be sure to include a check, money order or printout of your receipt from paying online.

Simply Pay Your Tax Bill

Sending the IRS your tax due will automatically provide you with you a six-month extension to filing your actual tax return itself. The IRS accepts credit and debit cards (although fees from the card issuer may apply), as well as direct transfers from your bank. If you can do a quick estimate of the tax bill you will owe, and you have paid or pay at least 90% of what you owe (through estimated payments, withholdings, or whatever you include with form 4868) then you will most likely be okay. However, if you do not owe any money or you are due a refund, you need to file a tax return, especially if you made more than the standard deduction.

Again, please remember that an extension on filing your taxes is not the same as an extension on paying your taxes. If you genuinely do not have the money, filing an extension will not allow you more time to pay, and you will still rack up penalties if you do not make a payment. If you cannot pay your tax bill, contact the IRS and ask for assistance and in most situations they will be happy to set up a monthly payment plan or some other type of payment arrangement. The IRS would rather work with you and get something set up now than wait for years while your penalties pile up.

So even if you are out of stamps, you are not out of time! File an extension and gain a little breathing room. At the very least, your accountant will thank you.

This guest post was provided by TaxDebtHelp.com, a site that provides news, tax tips and IRS debt help.

In December of 2010 the Congress and the Obama administration put in place a  tax cut package that would allow the current tax rates to continue for 2 more years, in addition to passing a 2011 payroll tax holiday, extending $1000 child tax credit and the estate tax.

While I was happy for an extension of the current tax rates, no matter how temporary, I was dismayed to find out that the millions of people who itemize on their taxes, myself included, would have to wait until mid-February to file their taxes.   Due to the tax filing delays a lot of people won't be getting their tax refunds as soon as they might like.  Thankfully, that delay is now over, and itemizers can file their taxes as of today, February 14th, 2011.

Tax Filing Delays For Those Who Itemize Ends Feb 14th

Because of how late in the year the tax bill was passed (December 17th, 2010), the IRS announced that the estimated 50 million taxpayers who itemize their deductions would not be able to file taxes until the IRS had a chance to update their software to account for the tax package. Sometime in late January the IRS announced that February 14th would be the first day that itemizers could file their taxes and have it accepted.

While the delay applied to an estimated 50 million taxpayers who itemize their taxes, of those only about 9 million would have actually filed in January in February anyway.

Tax Filing Deadline – For Procrastinators

If you don't plan on filing your taxes until the last moment, the tax filing deadline has been pushed back this year because of a government holiday on the 15th of April.  Tax day will now be on Monday the 18th of April.

Remember, even if you can't pay your entire tax bill, you need to file!

Use Online Tax Software To E-File To Get A Faster Refund

Many or most of the tax filing software have been updated for the new tax law since the beginning of the year, and if you want to get your refund the fastest, I'd suggest e-filing your return through one of those online tax software packages.  I usually file mine using TurboTax because I like it's ease of use, and how it tends to find me all the applicable tax deductions. There are a ton of other software out there as well, however, and any of them will probably work well.

Check out our article about filing your taxes for free for links to several popular tax software packages.

Checking The Status Of Your Refund

If you filed your taxes already, or if you itemize and you'll be filing this week, here's a post from a couple of weeks ago telling you where you can check the status of your refund, both for federal and for each of the states.

Are you itemizing your taxes this year, and will you be filing right away now that you can to get a refund?

Among the changes that took place due to the recent Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 was the reinstatement of an estate tax.   Due to gridlock in Congress last year, the estate tax was allowed to lapse.  That means anyone who had a wealthy family member die in 2010 could possibly see millions in tax savings.  For example, the family of George Steinbrenner will pay no estate taxes since he died in 2010.

Estate Tax Reinstated 2011

The tax bill that Congress just passed and President Obama signed in December reinstated the estate tax for the 2011 and 2012 tax years.   So what will the estate tax look like for the next two years?  Will it return to 2009 levels, or return to levels seen before the 2001 Bush tax cuts?

• Pre-2001 Bush Tax Cuts: $1 million exemption, and a 55% rate on estates worth $1 million to $10 million. Rate rises to 60% on estates worth more than $10 million.
• 2001-2009: $3.5 million exemption and a 45% tax rate on amounts over $3.5 million.
• 2010: No estate tax
• New Estate Tax For 2011-2012:  $5 million exemption for an individual or $10 million for a couple, with a rate of 35% for estates above these levels

So basically what happened was that the estate tax was re-implemented with a higher exemption, and at a rate lower than it had been from 2001-2009, and much lower than it had been before that.  So the estate tax is back for 2 years at least, at which time we'll need to revisit it again, or it will return to pre-2001 and Bush tax cut levels (55-60% rate)

From Don't Mess With Taxes:

For 2011 and 2012, estates worth $5 million or less won't be taxed at all. For estate values greater than that, a 35 percent tax rate will apply.

That's better than the 2009 law, which imposed a $3.5 million exemption and a 45 percent tax rate on the excess. And it's much better than what would have happened had the Bush tax cuts expired. If that had happened, estates worth more than $1 million would have faced a 55 tax rate. The bad news, though, is that Congress has set up a repeat of 2010. Unless it acts again in two years, the $1 million/55 percent rate law will be back.

How Many People Will Be Affected By 2011-2012 Estate Tax?

So now that the estate tax has been reinstated with a higher exemption, and at a rate lower than it used to be, how many people will be affected and still have to pay the estate tax?

The head of the American Bar Association's section that focuses on estate law estimates that less than one-half of 1 percent of people who die in 2011 will be hit by the estate tax. That's minuscule compared to the 10.5 percent of estates that paid Uncle Sam in 1977.

So while wealthy folks who died last year may have gotten away with paying no estate taxes, the families of those less than 1/2 of 1 percent who pass on this year can take solace that at least the estate tax is returning at a lower level than it was at previously.  They won't be subject to the 55-60% rates that were around pre-2001.

One other thing to note, while folks who died last year may not have had an estate tax, they also didn't have the benefit of a stepped up basis for capital gains taxes.  For a discussion of that, see this post that discusses the estate tax stepped up basis.

Also, in case it is any consolation, at least the tax rates in the US are at least somewhat lower than other countries: Tax Rates by Country

What do you think of the estate tax?  Do you think it is necessary and fair, or do you think that it is essentially taxing income twice?  What are your thoughts on the returning estate tax?