Important information regarding extensions:
- An extension is an extension of time to file, NOT an extension of time to pay.
- The IRS wants money by April 15, not the tax return. We should estimate if you might owe.
- There is nothing to fear about the IRS and extending. If you owe, underpayment penalty and interest start on April 15.
- We can estimate your tax liability (if any) and send money with the extension. Any over payment can be applied to the next year or refunded.
- There are new tax laws each year that may have little guidance available early in the year.
- Many brokerages, partnerships and other institutions issue revised forms.
- Many taxpayers get a refund on their prior year’s 401K over contribution, which often creates the need to amend.
- Extending allows you more time to fully fund your SEP Retirement Plan.
- Many taxpayers receive K-1’s after April 15 from third parties that utilize the extension strategy.