Filing taxes can be daunting, but understanding the purpose and process of filing an extension can provide much-needed clarity and relief. Let’s delve into the world of tax extensions and what they mean for you.
What does filing an “extension” do?
- An extension is a formal request to the IRS for additional time to file your federal tax return (1040).
- The extension period typically extends the due date by six months, shifting it from April 16 to October 15th.
- While filing an extension grants extra time to file, it’s crucial to estimate and pay any anticipated taxes by the original due date.
Why does my CPA suggest we extend my tax return?
- Your CPA might recommend an extension due to the complexity of your return or limited time within the filing season.
- CPAs often have cutoff deadlines to manage their workload efficiently and ensure accurate filings.
- Pending guidance or legislative changes could also prompt a suggestion for an extension.
Am I more likely to be audited if I extend?
- No, filing an extension does not increase your chances of being audited.
- It’s preferable to file an extension than submit an incomplete return or rush through the process without careful review.
What are the primary benefits of extending my tax return?
- Provides extra time to file without penalty, especially when waiting for missing information or tax documents.
- Offers opportunities for additional retirement planning or funding certain retirement plans.
- Generally, filing an extension is less expensive and reduces the likelihood of needing to amend your return later.
Should I do anything differently if I am filing an extension?
- Provide your CPA with all available information as early as possible.
- Anticipate and pay any taxes owed by the original due date.
- Consider making quarterly estimated tax payments if required, with guidance from your CPA.
- Discuss refund options and tax planning opportunities with your CPA to optimize your financial situation.
Is there anything I can do to avoid filing an extension if I know I am missing some information now?
- Provide all available documents to your CPA promptly to facilitate early preparation and review.
- Your CPA may be able to draft a return for review and add missing information before the original due date.
Have there been any changes to the due dates of returns for this year?
- As of now, there have been no changes to the due dates for tax year 2023.
