Why you should file a tax extension even if plan to file on time.

We are often asked if filing an extension will somehow draw additional scrutiny to a tax return or diminish the taxpayers standing in the eyes of the IRS. The answer is an emphatic “no!” In fact, there are several reasons to file an extension even if you intend to file by the original filing deadline. For example:

  1. You are protected from a late filing penalty if you extend the return and file by the extended deadline. Remember this an extension to file, not an extension to pay. You will still be liable for interest on any balance due.
  1. Superseding returns – once you file, any change or omission must be reported on an amended return. However, if your extension is in place, you file a superseding return that replaces the original return. The difference is with an amended return the original and the amended return are on record, but with a superseded return you are getting a do-over, and only the superseding return remains on record.
  1. Time to catch information returns. Sometimes taxpayers are not aware that they are required to file an informational return, often these arise where the taxpayer has elements of foreign income that they become aware of later in the year.

 

  1. Time to correct unexpected omissions or tax changes. Even if you plan to file on time, filing an extension will give you and your tax preparer more time to thoroughly review your return and fix any unexpected changes. You may even be able to make tax elections after the original filing which otherwise might not be an option on a timely filed return without an extension.

 

If you think you would benefit from filing an extension, or would like to learn more about the process, CKH Group is here for you. Reach out and let’s chat, you can book a free online consultation, or you can contact us at 1-770-495-9077 or email us at info@ckhgroup.com

 

The above article only intends to provide general financial information and is based on open-source facts, it is not designed to provide specific advice or recommendations for any individual. It does not give personalized tax, financial, or other business and professional advice. Before taking any form of action, you should consult a financial professional who understands your particular situation. CKH Group will not be held liable for any harm/errors/claims arising from the articles. Whilst every effort has been taken to ensure the accuracy of the contents we will not be held accountable for any changes that are beyond our control.