Kelly J. Bullis: Running out of time to file?
April 1, 2017
If you haven't filed your tax return yet, are you starting to feel that lump in your throat as you try to swallow? Nervous sweat breaking out yet?
If you're one of those people who waits until April 14 to start on your tax return, beware. That's usually what will cause you to make errors. Such errors may cause you to get a smaller refund or pay more to the IRS than you should.
There's a better way. It's called "Extension of Time to File." You do that by sending the IRS a properly filled out form 4868 (called "Application for Automatic Extension of Time to File U.S. Individual Income Tax Return" … nice, short name, eh?) by April 15. (Actually this year you have until April 18 because of some local holiday in Washington, D.C.)
Did you notice in the official name of the form the word "automatic?" That means the IRS must give you the extension you're requesting. You now have until Oct. 15 to file your tax return.
Warning: This is not an extension of time to pay any tax due. The "failure-to-pay penalty" for not paying at least 90 percent of the tax you eventually compute (if it's greater than $1,000) you owe is 1 percent of the balance due per month not paid. If you know you'll owe the IRS, then you can send a check in with the form 4868. Make sure you enter that amount on your tax return in the proper location to get credit for the amount you paid with your extension.
There are some rumors about filing extensions I would like to address. One is "You will increase your chances of getting audited." Not true. In fact, the official filing season the IRS uses ends on Oct. 15. They take all returns filed between Jan. 2 and Oct. 15 then put them in a program that selects returns for audit. In fact, filing by April 15 might actually increase your chances of audit if you make major errors that get the IRS's attention.
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Another is "you will just put off procrastinating to prepare your return until Oct. 14." That might be true if you put if off that long. I suggest you just finish your return in April or May and file, just don't rush it with errors. That's the best way to use an extension.
If you need help filing an extension, call up your local friendly CPA. Our firm and all the other CPA firms in the area are all capable of filing an extension for you.
Did you hear? Ecclesiastes 5:4 says, "When you make a vow to God, do not delay to pay it; For He has no pleasure in fools. Pay what you have vowed."
Kelly Bullis is a Certified Public Accountant in Carson City. Contact him at 775-882-4459. He's on the web at BullisAndCo.com and on Facebook.