Should You Get a Six-Month Extension to File Your Tax Return? Rob Wood Explains
April 17 is coming tomorrow. What should you do if you just feel that you aren’t ready to file your return? Well, one option is to get an extension and file at a later date. It is easy to get the extension, but taxpayers need to understand what they are doing before they make the request. In this report, tax lawyer Rob Wood explains how to file for the extension and some things to think about if you do.
First of all, Wood says, this is an easy thing to do. The IRS has created an automatic six-month extension for taxpayers. There’s no magic to getting the extension. There are no criteria a taxpayer’s situation must match in order to qualify for the extension. Just ask, and it’s yours. The IRS points out that a taxpayer can file a Form 4868 or file electronically. A tax professional can also do this for you.
One good reason for getting an extension, Wood says, is so that a taxpayer can file only once and file a correct return. It is not a good plan to file an incorrect return, then try to play “catch-up” by later filing an amended return. Do it once and get it right. If you don’t have what you need to do the job correctly, take the extension. Make sure you have all your records when it is time to file out the Form 1040. For example, you may not have received a Form 1099 that you need in order to get your return completed accurately.
Of course, Wood points out, an extension to file is not the same thing as an extension to pay. If you think you will owe some money, you should make a payment. You can make a payment online.
One concern that might arise is whether getting an extension increases your risks of being audited. The answer is that no one really knows. Wood thinks this is unlikely. Filing a shaky-looking return is much more likely to raise suspicions than simply taking six months more to complete your tax return.
But if you want to get an extension, do it soon. April 17 is the last day!
Robert W. Wood is the Managing Partner of Wood LLP, San Francisco. Often listed among the best tax lawyers in America, Wood has broad experience in corporate, partnership and individual tax matters. Concerning the tax treatment of litigation settlements and judgments, he is perhaps the preeminent tax lawyer in the United States. He is also an authority on merger and acquisition tax matters, tax opinions, offshore account and entity disclosures, and many types of tax controversies. The Legal Broadcast Network is a featured network of Sequence Media Group.