If you filed a six-month extension to file your 2008 return, the October 15th deadline is fast approaching. For most taxpayers, it is the last day to get your 2008 federal tax returns filed on time. Remember, your return must be postmarked October 15th, or if e-filing, you can still use the Free File program, available through October 15 with the IRS. The IRS is encouraging taxpayers to file electronically since electronic returns tend to have fewer errors than paper returns.
If you wait to file until after the October 15th deadline, it is possible you could be hit with failure to file penalties and interest if the IRS determines you owe taxes. According to the IRS, the failure to file penalty for returns filed more than 60 days late is the smaller of $135 or 100% of the unpaid tax. Interestingly enough, the failure to file penalty is generally more than the failure to pay. This means, even if you know you owe the IRS, you should file your return in a timely manner and settle your tax debt before the penalties and interest compound.
There are a few exceptions to these rules: military members serving in Iraq, Afghanistan and other combat zone localities, people affected by recent natural disasters may file after October 15th and those taxpayers who have paid over 90% of their owed taxes by the deadline will not be hit with the failure to pay penalty.