You've probably heard about extensions—not the kind that make your hair look luxurious, but the kind that give you extra time to file your tax returns! You might have a few questions, and we're here to provide answers.
What does filing an extension do?
Filing an extension is a formal request to the IRS for more time to submit your federal tax return. You still need to pay any taxes owed by the original due date. We’ll help estimate your tax liability so you can make this payment in April.
What are the differences between filing an extension for my S Corp and for my personal tax return?
An S Corp doesn’t pay taxes directly to the IRS or most states, except for certain exceptions like California's AB150. Instead, the income is passed to you, the owner, and you pay taxes on it individually. Therefore, the S Corp doesn't need to make a payment when filing an extension, and we automatically extend all S Corp returns. For individual tax returns, we need more information and a payment is required when filing an extension.
If I file an extension, what is the new due date for my tax return?
The extension grants an additional six months. This means your S Corp return will be due in September and your personal tax return will be due in October..
Why should I extend my tax return(s)?
There are several reasons to extend your tax return(s):
Incomplete Information: If you haven’t provided all your tax information by the submission deadline, extending gives us time to file an accurate return.
Pending Information: If you’re waiting for details from financial institutions or companies you invest in, extending allows you to file a complete return.
Legislation Changes: If there’s pending legislation that might affect your tax liability, extending is beneficial.
Retirement Contributions: If you need more time to contribute to a retirement account like a SEP IRA or Solo 401k, extending your tax return due date allows this.
Am I more likely to be audited if I extend my tax return?
No, extending your tax return doesn’t increase your chances of being audited. The IRS focuses on receiving accurate returns. Filing an extension is better than submitting an incomplete or incorrect return.
What should I expect when I need to file an extension?
Expect to pay any anticipated taxes by the original due date in April. Provide as much information as early as possible so we can estimate your tax liability accurately.
If I file an extension, does that mean nobody will look at my tax information until the fall?
No, we’re here to assist you year-round. We aim to finalize and file your tax returns as soon as we have all necessary information. Don’t wait until the fall to provide details—we won’t delay in preparing your returns!
We hope this helps clear things up! If you have any more questions, feel free to reach out. We're here to support you every step of the way.
Disclaimer: The information contained in this document is provided for informational purposes only and should not be construed as financial or tax advice. It is not intended to be a substitute for obtaining accounting or other financial advice from an appropriate financial adviser or for the purpose of avoiding U.S. Federal, state or local tax payments and penalties.