Guys,
My parents came here 5 yrs back for my graduation and their tourist visa is expiring in about a week.  When should they apply for extension? How should they apply? Do they need any new document/s from me?

Thank you.

 They should be able to apply for Visa now. When they apply for visa, you can send a letter to the consulate stating you will support them while they stay in US and they will return to Nepal on time. Also, you can send them your W2 for 2012 and your status document, it may be your GC or H1B approval. Hope it works out. Good Luck. 

Thank you Jobguru.
Is there any downside if they apply after the visa expires?

go to canada or mexico, get it renewed from there.

 mohanb, 

where are your parents right now? you said they were here 5 years ago, as far as i know even with the 5 yrs visa they can only legally stay in US as per the date the officer stamps the visa on the I-94 on their arrival at the port of entry. 

On your other question, it shouldn't matter whenever they go for visa. They can apply now, and if the consulate grants the visa then they will just void the last issued visa and grant them with the new dates.

I have got a feeling that your parents have become illegal here. Maybe a 5 year multiple entry visa was misunderstood as visa to stay in USA. I thought 1 year is the maximum one could stay on a tourist visa depending on the I-94.

I could be wrong though but i never heard of a 5 year visa to stay in USA.

I agree with freedom. When my parents came here in tourist visa, they were granted 6 months stay in the port of entry. Then they had to request for extension before the end of that 6 months deadline. Then they were granted for another 6 months. The maximum period one can stay is one year. After one year, they must leave US and then can re-enter. But they cannot stay here for 5 years in a stretch even if visa was granted for 5 years.

 Everyone is answering differently because the question is not very clear. 

They are in Nepal now. Yes, they were granted 6 months at POE and they returned after 6 months. They are thinking of reapplying. Thats why I want to know the reapplying process.

The process is exactly same, just like the first time. Show all documents again. Just the purpose of the visit will change.
Just did for my parents 2-3 weeks ago. They had expired visa for 2-3 months, but as someone has said it really doesn't matter.

They should be easily granted visa, just like they did for my parents. didn't even bother to look at the file.

When should they apply for extension?

They can apply anytime after the expiry.

How should they apply?

They should apply showing the purpose of the visit as they did before.

Do they need any new document/s from me?

Yes, treat this visit as a completely new one. Give all your current documents that support the reason for their applying for tourist visas as you did before.

Thank you guys, really appreciate. One last question, though they are planning to come just for a visit, what can be a good intent of visit to put in the document that I send?