Tax Return Extensions: Essential Tips

Alarm clock sitting beside a pad of paper with the words "tax extension" written in big letters.

Hey fellow taxpayers, the clock’s ticking with the Form 1040 deadline just around the corner—exactly 2 weeks from today! So, it’s crunch time to figure out if we can get our taxes done on time or if we’ll need to ask for a bit more breathing room. Here are some important points to know about tax return extensions.

Here’s the deal with getting a tax return extension for our federal Form 1040 taxes. Some advice might not fit everyone’s situation, but it’s worth considering if it could make tax season less of a headache,  and possibly even keep a bit more cash in our pockets.

Key Point: File for Tax Return Extensions Early. Let’s make sure any tax forms we’re required to file are either sent off or flagged for extension by April 12, 2024. This heads off any last-minute panic. It’s best to e-File these extensions so you know instantly whether the IRS got them. If, for some reason, an online extension doesn’t go through, having a few days to mail a backup and keeping proof of that timely mailing can save a lot of stress.

But just sending off a tax return extension request to the IRS doesn’t automatically make it solid. It has to show you’ve made a decent guess at what you owe for the year. If you just put $0 without good reason, thinking “I’ll deal with it later,” that’s not going to fly. The IRS can cancel that extension if they think it’s not on the up and up, And that could add penalties and interest to the amount of tax you owe, if the IRS finds something off during a later check-up.

Even though it’s rare for the IRS to say “nope” to a tax return extension after saying “yes,” it can happen if they think we’re not being straight with them. There are multiple tax court cases where taxpayers failed to convince the court, and got handed additional penalties and interest. In every case, the Tax Court found the taxpayer(s) lowballed their estimated tax and didn’t really try to get it right. Relying on a shaky extension doesn’t get us off the hook for missing the deadline.

So, bottom line: If you need that extra time, just make sure you do it by the book and with a reasonable guess of what you might owe. It could save many headaches later on.

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Gwen Harrison President

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