Be careful: It’s not always so easy to get an extension. There are many misconceptions in regards to extensions for filing your federal and/or state tax returns by the deadline. These are the most important facts to share.
1) Most people assume filing an extension is a matter of their preparer filling out a quick form and sending it along. Instant relief! The fact of the matter is we have to arrive at an approximate “taxable income” to show on the form, from there we can see how much is due the government and put that also on the form, and from there, enter how much you paid in all year. The difference between the amount “wanted” and the amount “paid-in” determines if you are (perhaps) due a refund or if you will (perhaps) still owe by the deadline – this year April 17th for IRS – which you would then want to send by the deadline to avoid interest charges on your unpaid balance. For those who owe, in addition to interest until the balance is paid, if you do not file an extension you will also be subject to penalties. That’s the basics in a nutshell.
2) For those with complex returns this is no easy task for preparers. Also, you do not want them to simplify it (just enter some quick figures) without coming to an approximate amount by preparing it as far as possible based on the information provided. Please understand that we would be doing you no favors at guessing and thus, for those who wait until the last minute, we charge for these services. We are simply too busy these last few weeks ensuring everyone’s needs are met, while still trying to save those who chose not to get us the information in time to file on time, penalties.
3) Which leads me to this: Most people are what I call “repeat offenders.” There really is no nice way of saying it and my intent is not to shame anyone, but you must know the above facts in order to understand it from the other perspective. I would much rather have as much information early in the season and have gotten as far as I can so that if you still need to file an extension, most of the information is already input. I have “the big picture” so to speak and may only have a few additional questions in order to file it, which is entirely different than needing to input everything at the last minute, double-check my entries, etc. Yes, a major contributor to why we work around-the-clock these last few weeks.
4) Please know you will have a difficult time finding someone to prepare your extension if you have a business, or sales of stocks without all the purchase price and sales prices, or a rental or any of the many other scenarios and walk in on the last few days with a box of receipts and state “Here, I just need to file an extension.” I have had this happen to me at 11:00 P.M. on the deadline date and in my early years, scrambled to meet the need. I refuse to do so now… for me… for you… for US! The consequences of that type of business is too high for both of us in perhaps fines, penalties, interest, and all around bad business.
So please, if I am not too late in my advice, STOP what does not HAVE TO BE DONE in the next 24 hours and get your tax information to your preparer. You could very well be saving yourself a headache because my best guess is that more than 50% of errors are made these last two weeks. Your preparer should thank you but if not, you can still thank them – we are stressed trying to provide the best service possible to you!
Thank you and I hope this helps give you an informative and different perspective.