Every year, many of our clients have to file an extension for their tax return. Reasons vary, but as returns become more complicated and cumbersome, and clients get increasingly busy and "forgetful" we could see this becoming more the norm. Extending isn't as bad as its reputation. The only downside to filing an extension is that although the IRS gives you more time to file, they do not give you more time to pay if you owe on your return. There could be penalties if you pay late, so be prepared. If you believe that you will owe, we will help you determine an amount to pay to limit your penalties.
Here are a few myths that we can readily debunk:
The IRS will penalize you if you extend. There is NO penalty for extending and the IRS generally won't turn you down. Extending just allows you to have a few extra months to get your ducks in a row. And you don't have to do anything except let us know you need an extension. We will file it for you!
If you extend, there is a high likelihood that you will be audited. There is no more likelihood of getting audited in August as there is in March. Some information indicates that the IRS has completed their required number of audits long before April 15.
I have to wait until closer to the deadline to file. You can file as soon as your tax return is completed. That can be on April 16 or up until October 15. And... if we file an extension, we can even submit the return before the April 15 deadline if we get the return completed before then.
Filing extensions is rare and hardly anyone does it. Many tax payers file extensions and will continue to do so. All an extension is doing is giving you more time to get yourself organized in order to file the best possible return.
Here at JCPA, we process returns on a first come first serve basis. The closer to the April deadline you are to getting us your documents, the more likely it will be that we will extend your return. Hopefully debunking these myths will help to ease any stress or concern you may have in doing so.
QuickBooks 2020 Desktop Version
If you are using the 2020 desktop version of QuickBooks and are considering switching to the online version and have questions or concerns, please reach out to us. We can help with the transition.