If your CPA uses the word “extension” concerning your tax filing, do you know what it means? It can be a useful tool, but it helps to understand how it is used, when it makes sense, and the real impact on paying your taxes.
First of all, it is really just a request that the IRS provide some additional time for you to complete your tax filing. The extension period is 6 months – from April 15 to October 15 (actually the filing deadline this year falls on April 18th).
There are often good reasons to request an extension. One reason could be that you are waiting on some important documents (e.g., corrected 1099s, Form K-1), before you can deliver all the necessary information to your CPA to complete your tax filing.
The good news is that requesting an extension does not increase your likelihood of being audited, and the extension request is automatically granted by the IRS.
However, the extension is not a delay to pay any income taxes due on April 15. Therefore, it is critical to still provide tax
information to your CPA before the initial filing deadline so a good tax estimate can be completed.
For more information and insight on extensions, you can click here for a copy of the AICPA article on this important and very timely information.
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