Good Morning Gentle Readers,
The most common response I get is this:
Well, what good is an extension if you still have to pay the taxes by April 15.
One of the most common misconceptions about extensions is that EXTENSIONS DO NOT EXTEND THE TIME TO PAY. Even my dad didn't know that.
You must pay what you owe by the due date of your return (April 17th, 2006) or you will incur some fairly significant penalties. On April 18th the penalty kicks in immediately and can be close to 5% of the unpaid taxes.
This is true at the state level as well.
New This Year: IRS extensions are now good for six months, which is a step up from the archaic system in place which required two rounds of extensions, the second of which required explicit IRS approval.
Too bad IRS didn't implement paperless extensions like many states have. IOW, no extension is required to be filed unless you owe money. Seems like if someone at IRS could see the benefit of changing the extended due date to six months, it would also make sense to go to an automatic, paperless system at the same time. Saving trees, saving labor costs, well, nobody ever went broke..............