Could an Extension Be Right For You?
Posted Mar 24, 2019
Few deadlines are more dreaded than the notorious April 15th tax deadline in the United States. Some people dutifully file their Form 1040 U.S. Individual Income Tax Return and related state returns as soon as their W-2 comes in the mail, perhaps anxious to receive a refund of taxes withheld throughout the year. But if your tax situation is more complicated and requires waiting for several 1099s or K-1s (and sometimes amended 1099s and K-1s), and a gathering of expenditures throughout the year on your part, you may have been putting off the dreaded task of compiling the information and sitting down with a software package or making an appointment with your tax preparer. Maybe you also owe Uncle Sam. It may be tempting to procrastinate and pull a late night to get the job done just under the deadline, but it may be in your best interest to file an extension, granting you six extra months to complete your returns (extended returns are due on October 15, 2019). Why wouldn’t you want to file an extension?
Some people fear that an extension draws the attention of the IRS and puts you at a greater audit risk. There is no evidence to suggest that this is true. However, if you make a mistake on your return or receive an additional 1099 or K-1 after you file and have to amend your return, the amended return does have to be carefully reviewed at the IRS office and these are more likely to be scrutinized.
An extension to file is not an extension to pay. If you extend and you owe taxes, you need to pay what you owe by April 15th. This is a situation where a good CPA is helpful.
Form 4868 is used to extend your return, and it doesn’t even require a signature. Your tax preparer or CPA can do it for you, or you can file it for free at the IRS.gov if you self-prepare. Extensions are automatic and do not require any approval from the IRS. You don’t even have to have a good reason.
With the April 15th deadline just a few short weeks away, instead of scrambling to gather your tax documents and hoping you don’t miss anything, consider if an extension might be right for you. File once and file correctly the first time.