Need More Time? Filing a Tax Extension is a Smart Move

Filing a tax extension can sometimes be necessary. It’s better to take the time to get it right than to rush and make errors. So, let’s look at what you need to know about filing a tax extension…and a very common misconception.

The role you play in the process

Your accountant can only provide the best tax and financial strategy when you’re part of the process. This means:

  • Honoring the internal deadlines for document submission
  • Promptly responding to questions from your accountant

If certain documents are late, that’s understandable. You can’t submit information you don’t have! So, sometimes, there is a need to file an extension. 

When would you need to file an extension?

  • If you’re unable to provide all necessary information in time for your accountant to prepare your return…
  • Or, if you have a complex tax situation that necessitates additional time to ensure that all details have been examined and the proper tax strategy applied…
  • If your corporate return was extended, you may not have everything you need to file your personal return…

These are three examples of when an extension makes sense. Remember, accountants have many tax returns to complete in a short amount of time. You will benefit from allowing your accountant the time they need to thoroughly examine your situation and consider all deductions, credits, and strategies. 

Rushing can lead to missed deductions, errors, or submitting an inaccurate return. 

When an extension could potentially save you money or prevent the need to file an amended return to correct mistakes, it’s always smarter to err on the side of caution.

Tax extension deadlines

If you are planning on filing an extension for your personal return, you must do so prior to the April 15th deadline. For clients of Harper & Company, we take care of filing extensions on your behalf. Filing an extension gives you until October 15th to file the return. 

However, do not fall victim to…

A very common misconception

Both individuals and businesses must pay the estimated tax liability before the due date even if filing an extension. Failure to do this can lead to penalties and fines.

Your accountant can guide you on how much to pay to remain compliant. Once your final return is filed, this amount will be reconciled either with an additional payment or a refund.

Filing an extension can be a necessary step to ensure your taxes are done correctly. Remember, an extension only postpones the due date for your return. Your payment is always due at the original deadline.

You can also check out this video from the IRS that explains what to do if you owe taxes and can’t pay in full by the April deadline: https://www.youtube.com/watch?v=f7f4Hye-9g0

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