Deadline Dilemmas: Common Questions on Extending Tax Returns
By Mahoney
Have you ever felt like Tax Day snuck up on you? If so, you aren’t alone. In 2022 over 19 million people filed an “extension” for their individual tax return, allowing them to delay the due date of their tax filing for up to six months. For most federal and state returns, an extension grants an extra six months to file, helping you avoid any late-filing penalties and giving you the invaluable gift of time.
As the years have gone on, extensions have become increasingly fraught with misconceptions, many of which are undeserved. In this blog post we will address the five questions we hear the most often.
Question 1: What are the benefits of filing an extension?
There are many reasons a taxpayer may choose to file an extension:
- Primarily, it gives the taxpayer the ability to gather their documents and have their tax return prepared at their own pace without needing to rush. This can be especially useful for taxpayers facing complex financial situations or unexpected life events.
- Taxpayers who own small businesses may need information to file their return that is not available by its original due date.
- Certain returns may have an easier time filing amended or superseded returns if an extension has been filed.
Whatever your reason, one important item of note is that the IRS does not ask for a reason when you file an extension. Even having no reason at all will not hinder your ability to extend your tax return.
Question 2: If I file an extension, will it also extend the time I have to pay my taxes?
No. Your income tax will continue to be due at the initial due date of your tax return and will accrue interest and penalties if not paid. In many cases an “extension payment” is sent with the filing of the extension to cover any tax the taxpayer anticipates owing.
It is for this reason that tax projections have become increasingly valuable, giving taxpayers confidence and peace of mind as they extend their return while sending a payment that minimizes any interest or other penalties.
Question 3: Is the IRS more likely to audit an extended return?
No, the IRS does not hold any sort of grudge against returns that have been extended. They are neither more nor less likely to be audited than tax returns that are filed by the original due date.
Question 4: Does it take a long time for the IRS to approve an extension?
No. If your extension is filed electronically, it may be accepted almost instantly, and there are no special requirements needed for a return to qualify for an extension.
Question 5: If I extend my tax return, do I have to wait until October to file?
No, even though an extension pushes the due date of a Form 1040 to mid-October, you may file your return at any time.
Conclusion
Whether you are facing complex financial situations, unexpected life events or just looking for additional time, filing an extension is an essential tool for any taxpayer.
Reach out to Associate Manager Tyler Sauve, CPA for more information on filing an extension and how it might be beneficial for your unique tax situation.
Next: Visit our official Tax Guide for FAQs
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