Should you File an Extension
on your Tax Return?
you've been procrastinating when it comes to preparing and
filing your tax return this year you might be considering
filing an extension.
While obtaining a 6-month
extension to file is relatively easy--and there are legitimate
reasons for doing so--there are also some downsides.
If you need more time to file
your tax return this year, here's what you need to know about
filing an extension.
What is an
An extension of time to file is a formal way to request
additional time from the IRS to file your tax return, which in
2017, is due on April 18. Anyone can request an extension, and
you don't have to explain why you are asking for more time.
Note: Special rules may
apply if you are serving in a combat zone or a qualified
hazardous duty area or living outside the United States.
Please call the office if you need more information.
Individuals are automatically granted an additional six months
to file their tax returns. In 2017, the extended due date is
October 16. Businesses can also request an extension. In 2017,
the deadline for most businesses (whose tax returns were due
March 15) is September 15th (October 16 for C-corporations).
Caution: Taxpayers should
be aware that an extension of time to file your return
does not grant you any extension of time to pay your
taxes. In 2017, April 18 is the deadline for most to pay
taxes owed and avoid penalty and interest charges.
What are the
Pros and Cons of Filing an Extension?
As with most things, there are pros and cons to filing an
extension. Let's take a look at the pros of getting an
extension to file first.
You can avoid a late-filing penalty if you file an extension.
The late-filing penalty is equal to 5 percent per month on any
tax due plus a late-payment penalty of half a percent per
Tip: If you are owed a
refund and file late, there is no penalty for late filing.
You can also avoid the failure-to-file penalty if you file an
extension. If you file your return more than 60 days after the
due date (or extended due date), the minimum penalty is the
smaller of $135 or 100 percent of the unpaid tax. You will not
have to pay a late-filing or late-payment penalty if you can
show reasonable cause for not filing or paying on time.
You are able to file a more accurate--and complete--tax
return. Rather than rushing to prepare your return (and
possibly making mistakes), you will have an extra 6 months to
gather required tax records. This is helpful if you are still
waiting for tax documents that haven't arrived or need more
time to organize your tax documents in support of any
deductions you might be eligible for.
If your tax return is complicated (for example, if you need to
recharacterize your Roth IRA conversion or depreciate
equipment), then your accountant will have more time available
to work on your return.
If you are self-employed, you'll have extra time to fund a
retirement plan. Individual 401(k) and SIMPLE plans must have
been set up during the tax year for which you are filing, but
it's possible to fund the plan as late as the extended due
date for your prior year tax return. SEP IRA plans may be
opened and funded for the previous year by the extended tax
return due date as long as an extension has been filed.
You are still able to receive a tax refund when you file past
the extension due date. Filers have three years from the date
of the original due date (April 18, 2017) to claim a tax
refund. However, if you file an extension you'll have an
additional six months to claim your refund. In other words,
the statute of limitations for refunds is also extended.
And now for the cons of filing an extension...
If you are expecting a refund, you'll have to wait longer than
you would if you filed on time.
Extra time to file is not extra time to pay. If you don't pay
a least 90 percent of the tax due now, you will be liable for
late-payment penalties and interest. The failure-to-pay
penalty is one-half of one percent for each month, or part of
a month, up to a maximum of 25 percent of the amount of tax
that remains unpaid from the due date of the return until the
tax is paid in full. If you are not able to pay, the IRS has a
number of options for payment arrangements. Please call the
office for details.
When you request an extension, you will need to estimate your
tax due for the year based on information available at the
time you file the extension. If you disregard this, your
extension could be denied, and if you filed the extension at
the last minute assuming it would be approved (but wasn't),
you might owe late-filing penalties as well.
Dealing with your tax return won't be any easier 6 months from
now. You will still need to gather your receipts, bank
records, retirement statements and other tax documents--and
file a return.
File an Extension? Don't Wait.
Time is running out. If you feel that you need more time to
prepare your federal tax return, then filing an extension of
time to file might be the best decision. If you have any
questions or are wondering if you need an extension of time to
file your tax return, don't hesitate to call.
If you have any questions about filing an extension, don't hesitate to call. Help is just a phone call away at
SMEED CPA Adds Financial
Services To Help Clients With
Investments & Insurance
often we here at SMEED CPA are asked about financial issues
that impact our clients investments and their portfolios.
We always offered our opinion and suggestions but in order to
help our clients actually execute the changes we suggest,
SMEED has created a Financial Services division.
SMEED Financial Services, Inc. will be able to
work with both individual and business clients on their
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SMEED Financial will include Michael Uadiale,
ACA, CPA, CGMA; and Pablo Blanco who has
recently joined SMEED and comes with over 18 years of
financial sales and advising experience with affluent
Watch your inbox and mail boxes for more specific information
on services SMEED Financial Services, Inc will make available
Would You Give Me Your
Feedback & Testimonial
on Our Hotline?
Hello it’s Michael Uadiale, CPA of
SMEED CPA Inc. We’ve just installed a toll-free
number that I would like for you to call and tell me how you
think we are doing as your CPA firm.
Just dial 800-609-9006
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Us Be Found on
Also as we expand our business,
we find more and more people are using
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When they do this we want to
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is to give us an
ONLINE REVIEW on our Google Maps/Places listing --->
or check us out at our YELP local listing
click here to go to our Google Listing for SMEED CPA and
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Scroll down to the Review area.
On either site it may say: Been here?
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give us a review!
You can choose between 1 and 5
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you in advance for your help and cooperation!
As always you can call our offices if you have any
questions about these or any other accounting related issues, at
Regards, Michael Uadiale, CPA,
Managing Partner, SMEED CPA,