As April 17th approaches, the inevitable question is, “Have you filed your taxes yet?” Hopefully you are all on the ball and if you had a refund due, you filed back around February 1 and if you owed, you are waiting for April 17th, right? Of course the nice thing about e-file is that you can file your tax return, and even if you owe, you do not have to submit your payment until April 17th.
In reality, procrastination is big for many of us. Here are a few tips on procrastinating on your taxes.
Did you know that you can file an extension to file your tax return so that you don’t have to file it until September 15th? It is a common misconception that extending your tax return makes you more susceptible to an IRS audit, but this is just not true. I know for professionally prepared tax returns the opposite is probably true. The IRS does not care that tax preparers tend to extend many of their clients’ tax returns. Tax returns that are extended, and then prepared professionally, are more likely to be done right. The same probably holds true for individuals who do their own tax returns, if they take a little more care and time.
If this is all news to you and sounds too good to be true, don’t get too excited just yet. The catch is that you have to pay any tax owed by April 17th or risk significant interest and penalties. By the time you add up all your receipts and figure out your tax situation and see if you are owed a refund or if you owe the government, you might as well do your tax return.
If there is a reason that you don’t have time to prepare your tax return and you do have an idea of how much you owe, or you know for a fact you will not owe a dime, extending your tax return is not the worst idea. You can find the file an extension form at the IRS website. Remember to pay any taxes due when you send it in.
If you live in a state with income taxes, many states simply allow an automatic extension if you file a timely federal extension. However, a few states require you to send in a state extension form. Check your state’s tax website for forms and instructions. Keep in mind that the same rule applies to all of the states; your taxes are due by April 17th, even if the tax return itself isn’t.
While there is a lot of speculation on whether or not there are additional advantages to extending your tax return, it is simply that. If you’re owed money, you don’t want to let the government hold your money any longer than it needs to simply on the speculation that it may be advantageous to extend the filing date on your return. On the other hand, it is also not worth owing penalties if you make some bad calculations and underpay your tax on April 17th. Filing for an extension is an option, but it’s important to use it to your advantage.