In a recent Tax Minute program, I talked about 3 reasons to extend your tax return this year. The 60 second video is available at:
Let’s summarize what these three reasons are:
- We had a lot of big tax changes this year. In fact, we’re still trying to figure out exactly what it all means. There is law coming down every week that is retroactive way back to 1/1/2018. Until we know what it all means, we’re guessing. And if we guess wrong, that means you have to file an amendment. That gives the IRS one more bite at the audit apple. Plus, there is a cost to filing an amendment. It’s better to just wait.
- And if you think we Tax Pros are having trouble, just imagine how the software professionals are doing! The software as of today’s date still isn’t complete and there are glaring errors in most of the major, off the shelf solutions. For now, it’s better to wait until it’s right.
- You have a bigger chance of being audited if you file on time. Seriously, if you extend your filing date, your chances of being audited go down.
After I taped the Tax Minute, I realized there was one more reason why you should extend your return.
- Your Tax Professional will have more time to concentrate on the preparation and strategy of your return. Face it, tax time is a busy time. It’s better to not be just one more thing for the Tax Pro to have to do. Your tax return deserves special attention and that almost always means having to pay less tax if you wait.
File Form 4868 to extend your Form 1040. Form 7004 will extend your S Corp or Partnership return, both of which are due 3/15/19. Form 7004 is also used to extend a C Corp tax return filing, but the due date will vary based on the fiscal year of the corporation. The return is due 2 ½ months after the corp’s year end.
Remember that this is simply an extension of time to file, not an extension of time to pay. If you owe tax, you’ll pay interest and possibly penalties if you don’t pay enough with the extension when you file it.