Extend Away

We have made it. It is now officially April.

For many of you, this will mean that your taxes are completed or that your return is on the verge of completion.

For others out there, this will mean that it is time to get an extension.

How people feel about extensions covers quite a spectrum. Many worry about them as if they could be some tip-off to the IRS that their tax return is not quite what it should be, like turning in a late assignment at school.  Well first, have you seen how the IRS is doing with its funding and employment lately? But even beyond that, realize that an extension is instead a chance to make sure that you do get everything right. You could potentially rush a return through with some numbers placed approximately where they belong, but that opens the chances for mistakes that really could draw someone’s attention more than that you had an extension before filing. After all, extensions are legal and offered by the agency to give you more time when it is needed.

On first glance, this then seems to say that April 15 isn’t really much of a deadline at all and that the real one doesn’t come until the extension is over in October. And to be fair, this could even be true for some people. For many, though, it is not the case.

Remember that an extension gives you more time to file your tax return, but it does not give you more time to pay any taxes owed. If you do owe taxes and do not file a timely return, you can start adding potential fees and interest you will owe on top of the original amount. This doesn’t mean that you instead should move to a strategy of not filing an extension, because what does it matter anyway? Where it matters is that the more on the up-and-up you remain with the IRS, the fewer of those fees you could be liable for. So if you know you will owe money, the agency even expects a payment to come with your extension.

In the spectrum of how people feel about extensions, though, are also those who have had one in the past and found it does not mean anything bad and instead revel in how it eases their time-crunch stress. It’s all just a matter of understanding where you stand in the process and what an extension means becomes of that.

Warmly,

Josh Bousquet
Connect to Us ~ Facebook ~ Twitter