Don't miss the August 15 tax filing deadline

According to the IRS, more than eight million taxpayers requested more time to file their 2001 income tax returns.  If you filed for an extension of the April filing deadline, you have until August 15, 2002, to send your 2001 tax return to the IRS.

What should you do if you can't meet the August 15 deadline?  If you need more time to file your return, you must file Form 2688 with the IRS by August 15, 2002.  On the extension request, you must tell the IRS why you need additional time to file.  While the first extension request is automatic, the IRS must approve your second request.  If your second extension is approved, you will have until October 15, 2002, to file your 2001 return.  You cannot request a filing extension beyond the October 15 deadline.

If you are self-employed, a second extension gives your company more time to make SEP, SIMPLE, Keogh, or 401(k) retirement plan contributions.  An extension also gives you until October 15 to make tax elections on your 2001 return, such as the deemed sale election for capital gains.

What happens if you miss the August 15 deadline?  If you don't send your return or request an extension by the deadline, you face a late filing penalty of 5% per month of any unpaid tax (up to a maximum of five months).