Time To Extend?

Well it has happened … it is April.

I know, we can barely believe it either.

And yes, that means that if you haven’t already filed your taxes, it is probably time to think about getting an extension.

Often, I know that can feel like a defeat. It is as if you didn’t hit a deadline and the extension is an admission that you did not do what you were supposed to do. And of course, it is still possible to probably rush, get through it, and still hit that dreaded date. But will you still be able to put forward your best tax return with that strategy? Quite possibly not. So instead, think of the extension as a way to help put yourself in the best position.

At the same time, though, this comes with a warning. Getting an extension gives you legal extra time to file your taxes but it does not gain you any extra time to pay your taxes. So if you come to the end of the return and you do owe money, an extension doesn’t mean that you get six more months to pay that amount. Once the original April 17 deadline passes, you are immediately subject to potential interest and penalties.

So with all this, what do you do now?

Well, there is no definite answer for everyone as there is a lot that can come into play. If you have a simple return, can file it yourself or find someone to do it to you, then it is probably best to just do so and get it out of the way. This is especially true if you are expecting a refund, for why not just do what you can to get that money as soon as possible? Even if you don’t need it right now, it’s better for you to have access to it than let the government hold onto it. If you are expecting to owe money, however, the sooner you start to work on handling that, the more stress you can let ease away and the sooner you start paying, quite likely the less you will end up paying in the end. But then again, if you simply are not ready to file, and do not have all the information you need to do so, the priority should be to gather that so you can start to get answers.

Overall, extensions aren’t defeats, and can often be necessary. At the same time, though, they should happen as part of a plan. So if you have procrastinated in a way that you have no answers to any of these questions, it is time to start knowing the answers to them. That way, even if you do get an extension on your return, you are still on a path that you know where it is taking you.

Warmly,

Josh Bousquet
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