Need help filing for an extension online - where do I send Form 4868 and how do I estimate taxes owed?

Thanks for the clear explanation! Two questions: 1) If I use TurboTax to file the extension, do I need to eventually file my actual return through TurboTax too? 2) What happens if my estimate is way off because of the missing W-2?

You don't need to use the same software for your extension and your actual return - they're completely separate. You can file the extension through TurboTax and then use H&R Block or any other system for your final return if you prefer. If your estimate is off, it depends on whether you underpaid or overpaid. If you underpaid, you might face late payment penalties and interest on the unpaid amount. The IRS typically charges around 0.5% of the unpaid taxes per month as a late payment penalty, plus interest. If you overpaid, you'll just get the excess back as part of your refund when you file your complete return.

That sounds interesting but I'm skeptical about using another service just for an extension. Does it handle state extensions too or just federal? And how accurate was your estimate compared to what you actually ended up owing?

Is it really worth paying for something like that when you can just file an extension for free through the IRS website? Seems like an unnecessary expense for something that's pretty simple.

It definitely handles both federal and state extensions, which was important for me since my state doesn't automatically extend when you file the federal extension. The estimate was surprisingly accurate - I was only off by about $75 on a fairly complicated return with multiple income sources. The value for me wasn't just filing the extension (which you're right can be done for free), but the peace of mind from having a better estimate of what I owed. The tax liability estimation tools saved me from both underpaying (which would have meant penalties) and significantly overpaying (which would have meant waiting months for a refund).

How does this actually work? I'm imagining some poor person sitting on hold for hours on their phone just to transfer the call to you when someone finally answers lol

Yeah right. Sounds like a scam to me. No way they can magically get you to the front of the IRS phone line when millions of people are calling. I'll believe it when I see it.

It uses an automated system that dials and navigates the IRS phone tree, then holds your place in line. When it detects a human voice (the IRS agent), it immediately calls your number and connects you with the agent. No person sitting on the phone - it's all automated technology. I was super skeptical too before I tried it! But desperate times (tax deadlines) call for desperate measures. I was shocked when I actually got the callback and was connected directly to an IRS agent. The whole process took about 45 minutes instead of the 3+ hours I spent previously getting nowhere on hold. The agent answered all my extension questions and even gave me tips on how to properly estimate my tax liability with missing forms.

Thanks for this tip about Form 4852! I didn't know that was an option. Do you have to try contacting your employer first before using this form? And did you face any issues with the IRS accepting your return with the substitute form?

Yes, you should make a reasonable effort to get your W-2 from your employer first. The form asks you to describe the steps you took to obtain the missing W-2. In my case, I documented my calls to the company's HR department and the bankruptcy trustee. I didn't have any issues with the IRS accepting my return with Form 4852. Just make sure your income and withholding estimates are as accurate as possible using your last paystub. If your employer eventually sends a W-2 that differs significantly from your estimates, you might need to file an amended return, but in my experience the paystub information was very close to what would have been on the W-2.

I accidentally underestimated by about $3k last year. Got hit with the failure-to-pay penalty (0.5% per month on the unpaid amount) plus interest. For me it ended up being about $120 in penalties total. Not the end of the world but definitely avoidable if you can estimate better.

I've found that if you can show you made a "good faith effort" to estimate correctly, sometimes the IRS will waive the penalties. Document everything about why your estimate was off. In my case, I had a surprise capital gains distribution from a mutual fund that I didn't know about when filing the extension, and the IRS accepted my explanation and waived most of the penalties.