I Need to File a Tax Extension - Now What?

Tax season can be a hectic time for many individuals and businesses alike. If you find yourself needing more time to gather your tax information and file your returns, don't worry – you're not alone. Filing an extension can provide you with the extra time you need to ensure accuracy and compliance with the tax laws. Here are some common questions and answers about filing a tax extension. 

1. What is an extension?
An extension, in tax terms, refers to the process of filing a Form 4868 with the IRS to request additional time to file your tax return. It provides an automatic 6-month extension beyond the original due date, typically until October 15th. It's important to note that an extension is only for filing your tax return and does not extend the deadline for paying any taxes owed.

2. Does an extension increase my audit risk?
No, filing an extension does not increase your risk of being audited by the IRS. An extension simply gives you more time to complete and submit your tax return accurately. As long as you accurately report your income and deductions, you should not face any additional audit risk.

3. Does it cost to file an extension?
In most cases, Cornbelt Financial may bill clients for filing an extension, particularly for document submissions occurring after June 30th. Additionally, it's important to note that the IRS typically assesses penalties and interest on any taxes paid after the original deadline (typically April 15th). If you anticipate having a balance owed, it's advisable to remit payment online or with your mailed extension to avoid additional penalties and interest.

4. How do I know whether I should submit a payment with my extension?
If you historically receive refunds and nothing has changed with your income or deductions, you can generally feel comfortable that you won't need to remit a payment with your extension. However, if you commonly have a balance due, it's recommended to remit a payment with your extension to minimize penalties and interest (https://www.irs.gov/e-file-providers/paying-your-taxes). If you've experienced significant changes or life events that may impact your tax liability, please complete the tax organizer and provide an explanation of what changed. Upload as much information as you have available, and we can review it to determine an appropriate estimate of tax to pay with the extension.

5. Does my state require an extension?
Most states grant an automatic extension alongside the federal extension. However, some states may have different requirements or deadlines. Regardless, the same principles apply – if you anticipate owing a balance, it's important to remit payment with your state extension to avoid penalties and interest.

Filing a tax extension can provide you with the time and peace of mind needed to ensure your tax returns are accurate and complete. If you have any further questions or need assistance with filing an extension, don't hesitate to reach out to our team. We're here to help guide you through the process and address any concerns you may have.