Not going to make this year's deadline for filing your federal tax return? No need to panic just yet.
Uncle Sam will grant you a six-month extension to file your tax forms, as long as you make the request by midnight Tuesday.
Filing for an extension doesn't spare you from having to pay your tax bill by the deadline, however. And failing to do so means you'll incur interest charges and fees on top of what you owe.
The Internal Revenue Service accepts extension requests three ways: By mail, via tax-preparation software, or online via the IRS website, www.irs.gov.
To request the extension, you must fill out IRS Form 4868, which is available on the IRS website, through most tax preparation software, as well as in public libraries and post offices.
If you opt to mail in the form it has to be postmarked by Tuesday to be considered on time. Forms filed online on the IRS website or by using tax software can be sent in as late as 11:59 p.m. EDT on Tuesday. One bonus of filing online is the IRS will confirm receipt of the request form right away.
If accepted, the extension request will give you until Oct. 16 to file a complete tax return. But that doesn't buy you more time to pay any taxes you may owe.
The IRS requires taxpayers to pay up by Tuesday's deadline, or face a host of penalties.
If you file your tax return on time or get an extension, but fail to pay, the IRS will charge you interest on unpaid taxes. That rate currently works out to about 3.25 percent and is compounded daily.
The IRS also will charge you a late payment penalty of one-half of 1 percent of any tax not paid by April 17. That translates to a $25 penalty if you owe $5,000. It is charged each month or part of a month the tax goes unpaid, up to 25 percent, or $1,250 on that $5,000.
That interest rate can jump to 1 percent, however, if the tax bill hasn't been paid within 10 days after the IRS issues a notice of intent to levy. But if you work out a payment plan with the IRS, it will reduce the rate to one-quarter of 1 percent.
The last thing you want to do is miss the tax filing deadline and not ask for an extension. That triggers a penalty of 5 percent of the tax owed for each month the tax return is late, for up to five months.
It's best not to try to calculate what you might owe in penalties and interest, the IRS will send a bill if you underpay.
What about filers who haven't sorted out their tax return yet and don't know how much they owe?
"They can send a payment to the IRS based on what they believe will be their tax debt, and once they have the extra six months, they can square everything away," said Annabel Marquez, a spokeswoman for IRS.
If your earnings were roughly the same in 2011 as in 2010, the easiest way to estimate what you owe is to add in slightly more than you owed last year. If you overpay, you'll get a refund after you file your return. If you underpay, you'll have to pay a penalty and interest on the difference.
The IRS accepts payments by check, online or by phone using a credit or debit card. More details on making payments are available on the IRS website.