Filing an extension, what value should I include in Total Federal Taxes owed? We are expecting a refund, so should the value be $0.00?

[JenniferM · Accepted solution]

If you are expecting a refund, you don't need to include a balance for federal taxes owed.

An extension to file is not an extension to pay.

This is one of the great little secrets about the Federal tax law. If you have a refund coming from the IRS—as about three out of four taxpayers do every year—then there is no penalty for failing to file your tax return by the deadline, even if you don't ask for an extension. As noted below, the penalty for filing late is a percentage of the tax owed with the return. And even 100 percent of $0 is $0. However, this might not be the case for state taxes.

That's not to say there aren't very good reasons for filing on time. Even if you have a refund coming, consider the following:

• You can't get your money back until you file, so you should file as soon as you can to get your money as soon as possible.
• The statute of limitations for the IRS to audit your return won't start until you actually file your return. So the sooner you file, the sooner the clock starts ticking.
• Some rather arcane elections must be made by the due date, even if you have a refund coming. This applies to a very tiny percentage of taxpayers.

[1rlb]

On application for extension form 4868, if I am expecting a refund should I write $0 in line 4, 6 and 7? And on line 5 should I put in the amount of Federal Income tax withheld on my W-2? Thank you

[PattiF]

Yes, those are the correct entries for Form 4868 if you don't have a tax liability.

@1rlb