The days may be getting longer, but your time to file a personal tax return is getting shorter. With the dreaded April 15th deadline looming, it might be the right move for you to file for an extension. Sometimes it’s the best move.
Sometimes filing an extension is not something you’ve done before. Fear not, since the mechanics are actually quite simple. You just need to complete and file on or before April 15th using Form 4868. (You can find this form at the IRS website: irs.gov.) And once filed, you’ve got an automatic extension from the April deadline out until October 15th.
But wait, there is a catch and it’s the money. Your extension is only good as an extension of time to file. It’s not an extension for you to make your tax payment later than everyone else. Sorry, but you must still pay by the original due date.
To make the payment you just send in a check with your extension. And even if you don’t expect to owe, you should still file an extension to show you have complied with the due date reporting requirement.
If you do owe, then estimating your payment is when having a seasoned tax professional in your corner is key. They can help you arrive at your estimated tax liability, even if there are items missing. And by making the proper extension payment, you avoid penalties and interest when you file the full tax return. In addition, a tax professional will consider your 1st quarter estimated payment, which is also due on April 15th, so that you aren’t in an underpayment situation for the year ahead. Often this kind of tax planning lifts the stress of a tax deadline considerably.
One last caveat: don’t forget to consider your state income tax extensions.
For a quick recap on personal tax return extensions: they don’t increase your audit risk, they do result in a more accurate return, they are due on the deadline and you do need to pay an estimated tax amount with the extension.