Updated

Can't get your tax act together by April 16? Just file for an extension.

Tick, tock. Uncle Sam's deadline is looming dangerously near, and you aren't nearly ready to file your taxes? Now could be the time to come up with a backup plan. Fortunately, the Internal Revenue Service has some sympathy for procrastinators: The paperwork for filing an extension is simple, and it will keep the Feds off your back until Aug. 15.

So what's the catch? In order to complete the paperwork, you have to come up with an estimate of your total tax liability for the previous tax year. You also need to know exactly how much you've already forked over to the tax man in the form of withholdings from paychecks, estimated tax payments and so on. And if it turns out that you owe money, you're going to have to ante up, based on your tax estimate. Now for some of us, once we've completed the exercise of coming up with an estimate, we might as well just go ahead and file our taxes. But if your taxes are complicated or if you're still waiting for information you need to complete your return, filing for an extension can be a major stress reducer.

Approval of your extension application is automatic, as long as the estimate of your previous year's tax bill is "reasonable." (You should be OK if your estimate is within 90% of the tax-liability figure actually reflected on your return when you get around to filing.) Just keep in mind, you will be charged interest (currently at an 8% annual rate) on any outstanding balance until you file your return and cough up the remaining part you owe. And if that unpaid balance is more than 10% of your total tax bill for 2000, you'll also be charged a 0.5% a month "failure-to-pay" penalty.

If you're still interested, you must notify the IRS that you want an extension by the April 15 deadline. You can do this by filling out Form 4868 (Application for Automatic Extension of Time To File U.S. Individual Income Tax Return), which you can download from the IRS Web site. And for the first time ever, you can now apply for an extension over the phone, by calling 888-796-1074.

Which way is easier? Honestly, both are about the same (and pretty simple). Even if you use the toll-free number, you'll still need to have all the information you'd need to fill out a hard copy of Form 4868 (which includes your Social Security number, your estimate for the tax year, how much has already been paid in, etc.). So even if you decide to file over the phone, you might want to print out Form 4868 so you're fully prepared for your phone call. You also need to have a copy of your 1999 return handy, since the IRS representative will ask for your previous year's adjusted gross income and total tax figures to verify your identity.