Hello and Legal Out's Quick and Dirty Tips for a More Lawful Life.

This episode is the second of a two-part series on your federal income taxes.

In the first episode I discuss the mechanics of filing for an extension to file your

return. This episode will focus on how and why you might

consider an extension and give you a few last minute tips on reviewing your return.

Moneygirl here. Here.

First off, if you're expecting a refund, it's a smart idea to file on or before April 17th

so you get your money back soon. Remember that if you're getting a refund

you've made a free loan to Uncle Sam. To find out how to adjust your withholding so

that you don't make a free loan to him again in 2007, check out episode

8 of my podcast.

If you do need more time to prepare your tax return, you can quickly and easily file an extension.

Filing an extension will buy you an additional six months to complete your tax return.

If you don't file an extension or your tax return by April 17th and you owe taxes, watch out.

The IRS can charge you a failure to file penalty of 5% of the tax due for each month your

tax return is late, up to a maximum of 25%.

So if you owe and know you can't file your return on time, be sure to file an extension by

April 17th to avoid this penalty.

If you'll be getting a refund on the other hand, there's no penalty for filing late.

Remember, getting an extension extends the date for filing your return only, not the date for actually paying your taxes.

Even if you file an extension you need to pay an estimate of the taxes you owe on or before April 17th to avoid a failure to pay penalty and interest.

The penalty for paying your taxes late, as opposed to failing to file for an extension, is actually not that steep. It's 0.5% for each month

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