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What extension filers need to do before October 17 deadline?

Many reasons make it necessary to apply for an extension to file a tax return. Were you still waiting on necessary paperwork? Did you run out of time to make an appointment with an accountant or complete tax software?

2015 may feel long ago and 2014 even more distant. But an IRS reminder this week encourages you to locate your 2014 adjusted gross income (AGI) prior to the October 17 filing deadline.

Electronic filing

More taxpayers file returns electronically each year. In 2015, more than 150 million tax returns were e-filed. The percentage continues to climb each year and is likely over 90 percent in 2016.

If you are preparing your own tax return, you will need to electronically sign it with a five-digit personal identification number (PIN) of your choosing. But to authenticate your identity, you'll also need your prior-year AGI. If you remember the PIN from 2014, you can use this along with your date of birth.

Obtaining your 2014 AGI

The general rule of thumb is that you should hang onto tax returns for three years. If it impossible to locate your 2014 return because it was lost in a move or destroyed by flood waters, you have another option. You can order a tax transcript. This takes five to 10 days though, so you need to take action soon.

Allowing the extension to pass can lead to a late, unfiled return. When you know that you owe taxes, the failure to file penalty will increase this burden. Ignoring the issue will not make it go away and in addition to penalties could eventually lead to criminal tax evasion charges. 

Options exist that can help you pay what feels like overwhelming tax debt. From requesting penalty reductions to submitting an offer in compromise, a tax attorney can help you resolve tax problems.

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