Don't Rush Your Return. Here's Why Extensions Aren't a Bad Thing.

With April 15th two weeks away, we want to get ahead of a question we hear every year: "Do I really need to file an extension?"

Short answer: probably, yes. Here's why it's not a big deal.

An extension is a tool, not a red flag.

Filing an extension gives you until October 15th to submit a complete, accurate return. It does not increase your audit risk. It does not mean you're late. What it does mean is that you're taking the time to get it right.

And for some added perspective: the majority of CPAs practicing in tax file extensions for their own returns. If it were a cause for concern, we'd be the first to know.

What an extension does not do.

It does not buy you more time to pay. Any taxes owed are still due April 15th. This is the most common misconception, and it's an important one.

A few things worth knowing.

• The failure-to-file penalty is steeper than the failure-to-pay penalty. Filing an extension eliminates that risk entirely.
• If you pay at least 90% of what you owe by April 15th and file by October 15th, you avoid the failure-to-pay penalty altogether.
• State rules vary. Pennsylvania and New Jersey are stricter about extensions than the IRS, so don't assume a federal extension automatically covers your state liability.

The bottom line.

Rushing through your return to meet a deadline, without all the right information, increases the chances of errors. The IRS wants complete and accurate returns. An extension gives you the time to file one.

If you have questions about where you stand heading into April 15th, reach out. We'd rather talk now than sort it out later.