About Real Estate: Homeowners may request tax extensions

Most Americans who can’t file their federal income-tax return by the April deadline set by the Internal Revenue Service can get an automatic six-month extension. But beware: It won’t necessarily relieve you from late-payment penalties and interest charges.

Q. We bought a house last December, but there is no way we can meet the April deadline for filing our federal income-tax return. How can we get an extension to file our return?

A. You need to get a copy of Internal Revenue Service Form 4868, “Application for Automatic Extension of Time to File U.S. Individual Income Tax Return,” and make sure the completed one-page request is postmarked by midnight April 18.

The usual tax deadline is April 15. But it has been extended this year to April 18 because Friday, April 15, is “Emancipation Day” — a holiday in our nation’s capitol, which marks the freedom of the slaves in the District of Columbia 149 years ago.

Because IRS rules state that filing deadlines cannot fall on a weekend or holiday, the “official” deadline this year is midnight on Monday, April 18, to send in a completed tax return or to request an automatic six-month extension.

The form needed to get an extension is available for free at IRS field offices, many postal centers and libraries, and through most accounting firms. You even can have the document faxed to you by calling the IRS toll-free at (800) 829-3676, or you can print it from the agency’s Internet site, www.irs.gov.

Remember, though, that getting an extension won’t delay your tax liability. You still will need to estimate the amount of any taxes you owe, report it on the Form 4868 that you mail, and attach a check for as much of the estimated bill as you possibly can. If the check is for less than 90 percent of the taxes owed, you’ll be hit with a late-payment penalty in addition to interest on the unpaid balance — but at least you’ll avoid the even stiffer cost of not filing an extension request or a completed tax return by the April 18 deadline.

Q. When a tree falls on a neighbor’s home, whose insurance company pays for the damage — the owner of the fallen tree or the homeowner who suffered the loss?

A. The damage would typically be covered by the policy that is owned by the homeowner who actually suffered the loss. The insurer, though, might then have the right to sue the tree’s owner for reimbursement of its payment to its own policyholder.

Q. When I lost my job six months ago, I took in a roommate to help cover the rent on my apartment. We have paid the landlord with separate checks promptly on the first of each month, and all of them “cleared.” When we brought the checks in earlier this month, though, the apartment manager said I am in violation of my lease agreement’s ban on subletting without prior approval from management and that he’ll start eviction proceedings against me if I don’t kick my roomie out immediately. What can I do now?

A. Landlords can ban subletting legally in most areas, or at least demand prior written consent before a new roommate moves in. So, if there is indeed a “no-subletting” clause in your rental agreement, management has the right to try to enforce it.

Contact your local rent board or landlord-tenant mediation group for advice. You might even be able to argue that the manager’s acceptance of checks from both you and your roommate in the previous several months without doing anything to resolve the situation earlier constitutes an “implicit waiver” of the anti-sublet clause.

If you win the argument, both you and your roomie should be able to stay in the apartment.

Q. We have a new 30-year mortgage for $180,000, with an interest rate of 5.8 percent and monthly payments for principal and interest of $1,056. If we add an extra $75 to each monthly payment, how much sooner will we get the loan paid off and how much would we save in finance charges?

A. If you keep the repayment schedule that the bank recently provided, you will pay $200,216 in finance charges over the next 30 years in addition to the $180,000 that you originally borrowed. Adding an extra $75 “principal only” payment each month would slash your payoff time to 25 years and six months, while also cutting your total interest charges to $163,052.

In other words, making a relatively modest $75 extra payment each month would allow you to own your home free of debt nearly five years sooner and also save more than $36,200 in future finance expenses.

Ÿ For the booklet “Straight Talk About Living Trusts,” or “Free and Clear: Getting the Mortgage Monkey off Your Back,” send $4 and a self-addressed, stamped envelope to David Myers/Trust, P.O. Box 2960, Culver City, CA 90231-2960.

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