With the tax deadline in just about a month, you may be considering filing an extension for your return. Often people can view needing an extension as a bad thing, but there can be some positives to filing one! Don’t be afraid to file an extension! It’s better to file and extension and get your tax return done correctly the first time than rush to get it done by the deadline then have to file an amended return. Read on to learn about extensions and how filing one could help:

What is an Extension?

An extension (filed with IRS Form 4846) allows you six more months to file your yearly tax returns. For State tax returns, extension dates and filing requirements do vary. For example, both Virginia and Maryland give an automatic 6-month extension once you file for a federal extension – you do not need to send a separate form to these states if no payment is due. Check with your tax-preparer or state’s tax website to learn more about their specific policies. There are also special situations such as living overseas or in qualified disaster areas that allow for automatic Federal extensions, so please speak with your tax preparer if you believe you may qualify.

Extensions are allowed by law; in fact, the IRS encourages it. It’s an extension of time to FILE your return, but there is no extension to pay your taxes. Taxes will still be due on April 15th (or the due date of your state return). You should still get what documents you have to your tax preparer as early as possible so they can work up a rough draft of your return and let you know any tax payments that are due. If you are working with our office, we will provide a conservative estimate of the taxes due to try to reduce or eliminate late payment penalties and interest.

What’s the Benefit of an Extension?

The IRS encourages people to utilize extensions, and there are some benefits to it as well.

These include:

  • Reducing potential late filing penalties.
  • Improving the accuracy of your return.
  • Provides additional time to fund a self-employed retirement plan.
  • Allows extra time to make elections.

There are few things to consider that filing an extension does not allow, such as gaining extra time to put money into an IRA or Health Savings Account – these still need to be done by April 15th.

Working with Our Office?

If our office is doing your tax return, we don’t charge you to file an extension if you need one or choose to file one to give you more time to gather needed documents. We have deadlines for both personal and business returns to encourage you to get your documents to us so we can manage our workload, but it also allows us the time to work on reviewing documents to file extensions. We will be in touch if we believe that you owe taxes but are filing an extension. Remember – just because you have an extension to file, it doesn’t change when tax payments are due. If you have questions about your tax extension feel free to reach out – or read our other blog on what to do after you’ve filed an extension.

Have More Questions?

We’ve talked in more detail in other blogs on what an extension is and how it can be helpful. But if you still have concerns about your return or what an extension might mean specifically for you, reach out to our team! You can contact us by phone at (703) 912-7862, email us, or schedule a meeting with one of our staff. Remember – we’re here to help, and filing an extension is just another tool to ensure that your return is filed accurately.