IRS form 3868 is the application for an extension of time for an individual to file their federal tax returns. Find out why it's necessary to have a good idea of what taxes are due when submitting the form 3868 with information from an independent CPA in this free video on tax help.
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Hi, I'm Miranda Chook, a CPA and I'm going to talk about IRS form 3868 which is basically the application for extension of time to file your federal tax return. So if you file this extension what you're doing is asking six months past the normal April 15th deadline. Or if your reason for filing the extension is that you're out of the country you're actually requesting four months past the normal two months extension that you would normally get. Keep in mind when you fill out this form that you have to have a pretty good estimate of what your taxes due are going to be because you have to remit that amount along with the form. So you're not just filing a form saying, hey give me six months, and play around for six months. You really have to have a pretty good idea of that final tax amount. Now the form itself can be found at the IRS' website at IRS.gov. Some libraries and post offices might actually have this particular form there, or else you can call the IRS at their toll free number. Now the form itself is pretty straight forward, just asks for your name, address, social security number. But the tricky part is on line four, which is the estimate of your total tax liability. Now the instructions to the form will tell what lines from 1040A, 1040EZ, whatever form you eventually will file. It'll tell you from which lines to take the amounts to put onto your application here. It will also tell you on the next line which is the so-called tricky one, the payments that you make will also tell you from which lines of the 1040 forms to take those amounts to transfer to your application here. Now the difference again will be the amount that you actually have to remit along with your application to extend to the IRS. You can file this via paper mail and if you do that then you'll send in a check or a money order along with the form. You can also actually apply online directly with the IRS, or some tax preparation software or tax preparation centers will have software where you can do online. And there you may be able to use a credit card to remit. And you want to keep a copy of that so for your records to make sure, to prove that yes you've paid an amount so that you can avoid some penalties and tax should they say you forgot to remit for some reason. Now you'll want this to be a pretty good estimate about 90% of what you will actually owe, otherwise you may be subject to some penalties and interest on that difference between what your final tax due is and how much you actually remitted on this application to file. So for specific circumstances that apply to you please check with an experienced financial adviser.