Tardy taxpayers may get late rebates

updated 2:58 p.m. ET April 10, 2008

NEW YORK - Tax filing day is just around the corner, but some Americans may not be ready to submit their returns by April 15. Others may not have the cash to pay the tax they owe.

Ignoring the deadline can cost workers plenty in penalties and interest. And this year, it also could delay their rebates, because the government's promised stimulus program checks are being calculated off federal tax returns.

"People know April 15 is the deadline," said Greg Rosica, co-author of The Ernst & Young Tax Guide 2008. "But sometimes they don't have their information together, or they might be missing some information or they just haven't had time."

Taxpayers who think they're going to miss the deadline should ask the Internal Revenue Service for more time to file. That requires them to submit Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, Rosica said.

Extensions are granted automatically and will give taxpayers until Oct. 15 to file taxes.

Last year, some 10 million taxpayers filed for extensions. This year, the IRS projects the number at 10.3 million.

Those who file by the Oct. 15 extension deadline still will qualify for the federal rebates, which will provide some 130 million Americans with checks of $600 for an individual, $1,200 for a couple and $300 for each dependent child. The program was set up to provide funds to consumers as a way to stimulate the flagging U.S. economy.

Taxpayers need to remember, though, that filing for an extension doesn't get them off the hook if they owe taxes.

"In applying for the extension, you still need to come up with some estimate of whether you owe additional money to the IRS," and pay that amount by April 15, Rosica said.

People who are short of cash have some options if they can't pay what they owe, said Mark Luscombe, principal tax analyst at CCH Inc. of Riverwoods, Ill. The company is a division of Wolters Kluwer, which provides tax information and services to tax professionals.

"If it's a short-term cash flow problem, you might consider paying by credit card with the hope you can pay off the credit card in fairly short order," Luscombe said. "Or maybe you can borrow from a bank or from your family."

Another alternative, Luscombe said, is for taxpayers who can't pay immediately to check whether they qualify for an installment agreement with the IRS.

MORE FROM TAX TACTICS

Tax Tactics Section Front

Start thinking 2009 taxes now Obama vows to simplify the tax code If you can’t pay your taxes, don’t hide from IRS Most taxpayers to use refunds for necessities Tax checklist: Deadline is a week away Tax changes may mean bigger paycheck Vermont leads list where residents taxed most What to do when you can’t pay your tax bill Work from home? Tips on tax deductions Are you eligible for a break? 9 tax tips Tax Tactics Section Front   Add Tax Tactics headlines to your news reader: