If you will be unable to file your South Carolina state tax return before the April 18, 2011, deadline, you should file an extension. A state tax extension serves as a notice to the Department of Revenue that you will be filing a state tax return this year. This will keep you from being charged with a penalty for late filing. In South Carolina, an approved extension request will be good for six months, giving you until October 18 to file your return.c 

However, it is important that you only file an extension when you have a valid reason for doing so. The South Carolina Department of Revenue can choose to deny your extension request and, if your reason for being unable to submit your return in a timely manner is considered invalid, your extension could be refused.c

Before you begin an extension request, you will want to gather all of the tax information that you need in one place to save time. Since you will be figuring your tax liability, you will need most of the information that you would need to file your state return. This includes the following:

1. Documentation of your earned income for the year - For employees, this will your income as shown on your Form W-2 or Form 1099. For self-employed individuals, this will be the gross earnings minus applicable business expenses.
2. Documentation of your unearned income that is also subject to South Carolina tax, such as unemployment compensation, rental property income or annuity payments
3. The total amount of state tax payments you made during the year - If you are employed, this will be listed on your Form W-2 as state taxes withheld. If you are self-employed, this will be the total of any estimated tax payments you made during the year.
4. A copy of your federal income tax return, if you are filing one
5. A paper copy of Form SC-1040 "South Carolina Individual Income Tax Return and the form instructions - You can download this from the South Carolina Department of Revenue website or you can obtain one at your local library.c 
   

To complete the extension form (if you are required to submit one), you will need all of the following:

1. Your Social Security number
2. Your current mailing address
3. Your spouse's name and Social Security number, if you are filing a joint tax return
4. The amount of your balance due
5. Form SC-4868 "Request for Extension of Time to File South Carolina Individual Income Tax Return" - This form can also be obtained from the DOR website or the public library.c  

If you prefer filing your extension electronically, you can do via the South Carolina Department of Revenue website for no charge. Simply follow the screen prompts and, if you have a balance due, you can also pay your taxes owed through the site using a credit or debit card or an electronic funds transfer.c

Once you have all the information and forms you need, you can start calculating your tax liability. Tax liability is the amount of tax that is owed on your taxable income. Your payments are then subtracted from this amount to find out exactly how much tax you will owe with your return, if any.c 

Begin by getting out your South Carolina tax return (Form SC-1040). Enter the amount of your federal taxable income on line 1. The form will tell you where to find this information on your IRS Form 1040. Then stop and read the form instructions before you proceed to make sure that you understand what state credits you will qualify to claim.c 

Work your way through the form, adding and subtracting any income adjustments that apply to your circumstances. After you calculate your total taxable income, you need to consult the tax tables (also located in the instructions) to find the amount of total tax owed on your income. This is your tax liability.c 

From here, you will subtract the total state income tax payments (either your state tax withholding or your estimated tax payments) you made during the year as well as any state credits you qualify for. What is left over will be either an overpayment (refund) or an underpayment (taxes owed).c

If you will be receiving a refund and you have already been approved for a federal tax extension, you can skip this step. South Carolina will automatically grant you a state tax extension along with the federal request. You only need to attach a copy of your federal extension form to your state tax return when you are ready to file it.c 

But if you are receiving a refund and you are not filing a federal extension or if you have a state tax balance due, then you will need to complete Form SC-4868. Begin by completing the personal information section. Enter your Social Security number, name and address. If applicable, enter your spouse's name and Social Security number.c 

Transfer the figures you calculated in step 2 to the accompanying worksheet of Form SC-4868. This will serve as a confirmation of your work or you can simply use this form in step 2. In box 6 on page 1 of the form, enter the amount of your tax balance due. If you are entitled to a refund, enter zero here.c

Make two copies of the form. You will keep one for your records and you will need to attach the other to your state return when you file it. If you have a balance due, you need to enclose a check or money order for your balance and send it along with your return to the address given on the form. Be sure to submit it by April 18 to avoid the late filing penalty and compound interest on the balance.c

To avoid last minute filing, begin working on your state tax return immediately. If you need additional assistance, consult a tax advisor.