Tax 2006: In Case You Can't

Your 2006 taxes are due by midnight of Tuesday, April 17, 2006. In case you are not prepared to submit yet, here are some useful information:

Individual Extension: You can now use Form 4868 to obtain a single automatic 6-month extension -- until October 15th. Perhaps you are aware that the Form 2688, which was meant for getting a second extension, was eliminated after 2005. By filing for an extension you will avoid the late filing penalty (5% per month with a maximum of 25%), but you will still be subject to interest and late payment penalty in case you owe any taxes.

Business Extension: Starting January 1, 2006, all eligible business taxpayers can use form 7004 to request an automatic 6-month extension to file returns. In prior years, non-corporate business taxpayers had to request an initial 3-month extension, and then another 3-month extension, if needed.

It's better to make a good estimate of how much you'll owe to IRS for your 2006 tax and send a check with your extension form if you file by mail, or authorise the I.R.S. to automatically withdraw the amount from your bank account on April 17 if you file electronically.

If, however, you owe nothing, or much better, Uncle Sam owes you, there is no penalty. You do not have to apply for extension. File as soon as you can depending on how fast you wish to get back your money from Uncle Sam.

Here is the link to all kinds of Forms and Instructions from IRS website.