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Everything you need to know about filing an extension

The tax deadline is now less than a month away! But if you aren’t ready, don’t worry. It’s not too late to request more time to file. Here’s what you need to know about filing an extension:

What does filing an extension mean?

If you need more time to file an accurate and complete federal tax return, you can file Form 4868 with the IRS to request an extension. This will give you six more months, or until October 16, to file your return.

Note that an extension only provides additional time to file your return. It does not extend the amount of time you have to pay any estimated tax due, so be sure to make any necessary payments by April 15th (April 18th for 2022 tax returns) orcheck out other repayment options.

How do I know if I need an extension? 

Your tax preparer may recommend you file an extension for several reasons. You may need an extension if parts of your return are particularly complex or may be affected by pending legislation. If this is the case, your tax preparer should let you know what to do.

If you are still waiting on any tax forms or additional information (e.g. Schedule K-1s, corrected 1099s, or othertax documents), you’ll likely need to extend to avoid filing an incomplete return or amending your return later. Filing an extension is usually easier and cheaper than rushing your return and needing to amend it later.?

If you don’t have a tax preparer but need assistance with your taxes, this may be another good reason to extend! Since the April deadline is fast approaching, many tax professionals won’t have time to finalize your return. It’s a good idea to work with a professional to make sure your taxes are correct, so even if your chosen tax professional will not be able to file your return by April 18, you can still file an extension and work with them later.

How will an extension affect me? 

Filing an extension is better than filing an incomplete or incorrect return. As long as you have withheld or paid enough money into the IRS by April 18, an extension won’t change much about the tax filing process. If not, then you will need to make a payment when you file an extension to avoid late payment penalties later. You should still provide information to your preparer as it becomes available. Believe it or not, an extension won’t increase your odds of being audited.

If you need help getting your taxes done correctly and on time—whether that’s in April or October—Padgett’s nationwide network of CPAs and EAs can help. Find an office near you today!?