Many Americans think of April as tax season, you rush to make sure you file by the deadline, then wait another year and do it again. However, for many Americans, the deadline passes April 18 and moves on to October 15 because of extensions. Some people need extensions to gather forms, while others need the extensions because of the sheer complexity of their filings. Here are a few notes and tips when filing for an extension.
First and foremost, realize that filing an extension does not allow the taxpayer to put off paying any tax liability until October. An extension allows more time to file, but your tax liability is due by the April deadline, whether or not you request an extension.
One example of a taxpayer who may need to file an extension would be someone self-employed with a set retirement plan. This is because they may be unable to make the required annual contribution before April. If the taxpayer does not have the money in April, they can file for the extension and hope to have it by October.
Another important note is that many taxpayers may fret over the idea of filing for an extension because of the myth of a greater chance of audit, but the reality is there is no fact to the belief. The fact is the more complicated the return, the more likely you are to be audited, but it does not stem from the extension filing.
If you have questions about tax extensions or filings, the deadline is coming up so contact us at the Center for Financial, Legal & Tax, Inc.