How to ask for an extension

When it comes to requesting an extension on your taxes, there’s some good news and some bad news to consider.

The good news is that every American taxpayer is eligible for an automatic extension if they only ask, pushing back the due date of their return six months to Oct. 15.

The bad news? That extension is only for the paperwork itself, and not any tax payments due to the Internal Revenue Service.

“What many people do not realize is that filing for an extension only extends the time for the filing of the proper IRS forms,” said Bob Phillips, a certified public accountant and managing principal at Spectrum Management Group in Indianapolis. “It doesn’t extend the time to pay taxes that are owed. If you owe tax, you still must pay it by April 15 in order to avoid penalties and interest.”

Not everyone looking for more time is trying to duck paying the tax man, of course. Some folks simply haven’t received the appropriate paperwork yet and can’t meet the deadline through no fault of their own.

Phillips said that, in his experience, the need for an extension “usually is due to not having all the information they need to properly complete their tax return by April 15.” Frequently, this is a problem faced by investment in a partnership or business, where paperwork is a bit more complex and isn’t always sent out promptly.

In these cases, an extension is a no-brainer. Filing incomplete taxes not only may cause you to miss important deductions, but also can leave you open to an IRS audit if you don’t produce documents they are expecting to receive at tax time.

Just remember to make that estimated payment in good faith, Phillips notes.

And if you don’t owe any taxes? Well, it may be tempting to think that the April 15 deadline doesn’t apply to you. But even in these cases, it’s important to make a formal request for an extension even if you don’t have any prepayment to make.

That’s because even if your itemized return shows no tax burden or a tax refund due, the IRS doesn’t have any of that specific information; you may actually have an outstanding bill by their calculations. Filing your taxes, then, is a way to make sure you’re on the same page as the tax man and that no undeserved penalties are levied.

Besides, if you’re owed a tax refund from the IRS, what’s with all the procrastinating?

The longer you delay mailing in the forms, the longer it is until you get that refund check.