The News Herald (Willoughby, OH)
Paul Pahoresky: Time to file an extension?
The tax filing deadline is rapidly approaching. Its important that you submit something by that date.
With the Indians playing ball and the Cavaliers entering the playoffs this can only mean one other thing - that the tax filing deadline is upon us. Most people have filed their taxes by now, but for those who have not it is important that you do not ignore this requirement and that you take the necessary steps to fulfill your tax reporting obligation.
The April 18, 2017 tax filing deadline is rapidly approaching and it is important that you submit something to the taxing authorities by that date. If you were not able to complete your tax return by that deadline then it is important that you submit a Form 4868 Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. For the 2016 tax filing season the deadline is actually Tuesday, April 18 due to a local Holiday of Emancipation Day for Washington, D.C. falling on Sunday, April 16. It is important to note that the filing of this form with the IRS serves as an extension for your Federal, State of Ohio, and most local tax returns.
One of the misconceptions as well as challenges with the filing of an extension, however, is that an extension is simply an extension to file, but not an extension to pay. As such, a taxpayer must have all tax obligations paid by the April 18 tax filing deadline to avoid any penalty and interest charges associated with late payment of their tax obligations.
This rule that the extension to file is not an extension to pay can be problematic at times. When a taxpayer is still awaiting documentation to complete their taxes such as a K-1 form from an investment then they need to have a solid estimate of the income reported from that investment to have a good handle on the resulting tax consequences. As a result, it is important that you make a solid estimate that would be on the high side for the anticipated tax balance. In the event that you over pay the taxes the overpayment can be refunded or credited to the following tax year.
There is no separate extension form for the State of Ohio. A copy of the IRS form 4868 acts as any type of extension verification for the State of Ohio.
However, just like the IRS, the State of Ohio requires all taxes to be paid in full by April 18 to avoid any additional late payment penalties. So, it is advisable that you make an estimated payment using the Ohio IT 40P Income Tax Payment Voucher by April 18 so that your tax liability is fully covered.
Similar to the IRS, any overpayment at the eventual time of filing the return can be refunded or credited to the following tax year.
The local returns vary in how to make your extension payment. The Regional Income Tax Agency (RITA) is the primary tax collecting body for many municipalities in our area. The easiest way to make a payment for your extension is to call 440-526-0900 and make a credit card payment. You can also send in RITA Form 06 Efile Payment Voucher with a payment, but since RITA does not charge anything additional to make a credit card that is how I personally prefer to make my RITA estimated tax payments including extension payments.
Other local taxing authorities such as Euclid and Wickliffe which are independent and service their own communities are a bit more problematic. These communities require you to mail or fax a copy of the form 4868 to them prior to April 15th. If you do not they will charge a late filing penalty of $50. In addition, all tax payments must be made by April 15 to avoid additional penalties and interest as well.
So, if you have filed your returns by now you are in good shape.
However, for those who have not already filed their 2016 tax returns then make sure you have something submitted, including full payment, by April 18, 2017.