I am often asked by clients whether they should file an extension or not. My answer is simple: if you don’t have your tax documents ready to where you can produce an accurate tax return by April 15 (or, for this tax year, April 18), then file the extension. You can have your tax preparer file it for you, or you can go online and do it yourself. I include that service for my clients, so all they have to do is phone me or e-mail me the request.
Remember, a tax return extension is NOT an extension to PAY your taxes! If you owe taxes, then they are still due on April 15. If you don’t know how much you will owe, at least give it your best estimate and mail your check with the extension. That will reduce or avoid the potential penalties and interest.
Unless your tax preparer shuts down after April 15, (the Big Bear Tax Lady is available year-round for tax returns), a nice advantage for filing an extension is that your tax professional will be able to give you more time after the tax-season crunch is over. If you have a complicated return, or prior tax issues, having that extra time during the slowdown can give you the chance to ask lots of questions and make sure you don’t miss a deduction!