April 17 was quite a few weeks ago; hopefully you either filed your tax return or submitted Form 4868 which gives you an automatic extension to file your return. If you are working with our office and your tax information wasn’t dropped off by March 15 we were in touch and filed an extension for you.
So what now? The extension has been filed and you should have paid an estimate of what you though you owed, if anything. Realize that the extension is just to file the return, it is not an extension to pay taxes owed. If you owe taxes you should have estimated what was due and paid that in when you filed the extension. The extension due date is still months ahead but don’t wait until October to look at your taxes again! Life is busy and it will always be so; set aside some time here and there to work on your taxes and get them done as soon as possible especially if you are owed a refund.
If you haven’t pulled everything together yet to get started (or to pass along to your CPA) start there. Find all those W-4s, interest statements, letters and receipts for charitable donations, and any other paperwork you need to complete your tax return and put them in a folder then sit down and get to work. If you’re still waiting on paperwork from a financial institution, follow up and find out when you can expect to receive it or have it resent if it was lost.
If you are due a refund you want to file your return as soon as possible so you can your money back. Don’t let the government earn interest on your money when you could be earning that interest. If you owe money, you still want to file as soon as possible. The IRS charges interest and possibly penalties if you underpay your taxes so the longer you wait the more you may end up paying. If you sent in an estimated payment in April you want to finish your tax return so that if you overpaid you can get your refund and if you underpaid you can pay the balance to reduce possibly penalties and interest you owe.
If you have been delinquent in filing past returns and are owed a refund there is a three year limitation on getting that refund. If you filed for an extension this six month period is included in the three years but after that three year window you will not receive a refund if you were initially due one.
Are you self-employed? If so and you filed for an extension you can use the “extra” time to fund your SEP-IRA, 401(k), or SIMPLE-IRA. The 401(k) and SIMPLE plans need to have been set up during the tax year but can be funded anytime up to the extension deadline. A SEP-IRA can be opened and funded for the previous year by the extension deadline (as long as you filed an extension). This funding extension does not apply to traditional or Roth IRAs.
The bottom line is if you filed for an extension you should be working diligently to finalize your tax return and get it filed as soon as you can.
The preceding article is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that LeMay & Company is not engaged in rendering legal, investment, insurance or other expert advice in these areas. If expert assistance is required, the services of a competent professional should be sought. The views and conclusions expressed herein are those of the writer and not necessarily those of LeMay & Company. Any tax advice contained herein is not intended to be used, nor may it be relied upon or used; by any taxpayer for the purpose of (1) the avoidance of any tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions, or (2) promoting, marketing or recommending another party any tax transaction or tax-related matters that may be addressed herein