Taxes: Filing extension

[Wayfairers]

We’ve never filed a tax extension but considering it this spring when we will be on a world cruise that doesn’t return until May 11.  Thinking that would be better than trying to file while on the cruise.  We will be doing research on how to do it, but, thought I would ask here since I’m sure many of you have filed an extension before. 
 

Has anyone done their own taxes and filed an extension?  Did you have to estimate tax liability and pay when you filed the extension?  What if you don’t owe much, do you still have to pay when you file the extension?

[JM0115]

52 minutes ago, Wayfairers said:

We’ve never filed a tax extension but considering it this spring when we will be on a world cruise that doesn’t return until May 11.  Thinking that would be better than trying to file while on the cruise.  We will be doing research on how to do it, but, thought I would ask here since I’m sure many of you have filed an extension before. 
 

Has anyone done their own taxes and filed an extension?  Did you have to estimate tax liability and pay when you filed the extension?  What if you don’t owe much, do you still have to pay when you file the extension?

Good idea to file an extension. Yes you have to be sure you have paid all tax liability. Can send money in when you file the extension.

 

alternatively you can do your taxes onboard during a few sea days.

[wdw1972]

When you file for an extension you have to estimate all the numbers, and pay the tax estimated to be due.  Later after the extension you'd "settle up" with the real number and pay the balance (hopefully small, to avoid penalties) or get a refund.

 

Sue/WDW1972

[Wayfairers]

1 hour ago, wdw1972 said:

When you file for an extension you have to estimate all the numbers, and pay the tax estimated to be due.  Later after the extension you'd "settle up" with the real number and pay the balance (hopefully small, to avoid penalties) or get a refund.

 

Sue/WDW1972

That is how we thought it works, but someone recently told us you don’t pay anything when you turn in estimated taxes.  Maybe they owed zero or close to zero

[wdw1972]

2 minutes ago, Wayfairers said:

That is how we thought it works, but someone recently told us you don’t pay anything when you turn in estimated taxes.  Maybe they owed zero or close to zero

I'm almost certain that someone was wrong.  I was an enrolled agent with the IRS many years ago and remember that clearly.  I doubt it's changed, but check the IRS website to be certain.

 

Sue/WDW1972

[Wayfairers]

11 hours ago, wdw1972 said:

I'm almost certain that someone was wrong.  I was an enrolled agent with the IRS many years ago and remember that clearly.  I doubt it's changed, but check the IRS website to be certain.

 

Sue/WDW1972

Thank you!

[Jim Avery]

We have run into this issue  as most world cruises are over tax time for US citizens.  Long ago we quit doing our taxes as just too complicated but the process is the same doing it yourself.  First, an extension must be properly filed.  It is relatively easy in IRS terms but you have to accurately predict what taxes you will owe even though you have none of the year end tax forms so have absolutely no way to accurately predict what your tax liability will be under a given years rules.  Underestimate and you will suffer penalties and interest.  So, like most, we make sure to send adequate$$$ to cover all possibilities.  Penalties and interest or give the IRS an interest free loan.  Surprise, the system is working exactly as the government designed it.  Win-win for them.  

[Wayfairers]

On 7/23/2023 at 8:33 AM, Jim Avery said:

We have run into this issue  as most world cruises are over tax time for US citizens.  Long ago we quit doing our taxes as just too complicated but the process is the same doing it yourself.  First, an extension must be properly filed.  It is relatively easy in IRS terms but you have to accurately predict what taxes you will owe even though you have none of the year end tax forms so have absolutely no way to accurately predict what your tax liability will be under a given years rules.  Underestimate and you will suffer penalties and interest.  So, like most, we make sure to send adequate$$$ to cover all possibilities.  Penalties and interest or give the IRS an interest free loan.  Surprise, the system is working exactly as the government designed it.  Win-win for them.  

Thanks.  My husband does our taxes and always does an estimate late in the year to make sure we don’t need to make any changes before year end.  Of course there are always slight differences, but he is usually fairly close.  We are going to be onboard from Oct to May so not as easy as doing that at home.  At least everything (or almost everything) is electronic now - that helps.  And, we have 2 days (spaced 12 days apart) in FLL during cruise changeovers on our B2B2B.  

[Gail & Marty sailing away]

( filed an extension) we always do every year ...

[Wayfairers]

3 hours ago, Gail & Marty sailing away said:

( filed an extension) we always do every year ...

Any issues with doing it electronically that we need to be aware of?

[Gail & Marty sailing away]

10 minutes ago, Wayfairers said:

Any issues with doing it electronically that we need to be aware of?

No problem every year.