The federal tax return deadline of April 18, 2023, has come and gone. If you weren’t prepared to file, hopefully you requested an extension by filing Form 4868, which gives you until October 16, 2023, to file your 2022 federal income tax return. Whether you haven’t been able to put your tax information together yet or are waiting for a final statement or K-1, don’t fret. Sometimes circumstances outside of your control can delay your receipt of all information needed to file, which is why we file an automatic extension for our returning clients and new clients who have provided us with the appropriate information.
Here are some things we want anyone who files a tax extension to know:
Will the IRS charge me more if I file a tax extension?
No, the IRS does not impose additional taxes or penalties for filing an extension. However, it’s important to note that an extension only extends the time to file your tax return, not the time to pay any outstanding taxes if you have a balance due. If you fail to pay the amount due, you could incur penalties and interest—and that’s how extensions have gained a reputation for costing taxpayers more than filing on time. When we file tax extensions for our clients, we use all information available at the time to estimate the amount of tax due, helping those clients to avoid additional costs.
Can I simply go online and make a tax payment myself if I have a reasonable estimate of what I’ll owe?
Yes, if you have a reasonable estimate of your tax liability, you can make a payment at www.irs.gov/payments. Remember to have your 2021 tax data readily available to verify your identity during the online payment process. If you need assistance determining the accurate amount to pay or have any questions about the process, we can provide guidance and ensure your extension payment is made correctly.
What are the other effects of filing an extension?
Filing an extension grants you additional time to finalize your tax return and extends the statute of limitations on your return. This means that the IRS has an extra six months to review your tax filing if they have any questions or concerns. An extension can work to your advantage in the event of retroactive legislative changes that positively impact your tax situation. By filing an extension, you gain an additional six months to take advantage of such changes.
Will the IRS be more likely to audit me for filing a tax extension?
No, this is a myth. Filing an extension does not increase the likelihood of an IRS audit. The IRS determines audit selection based on a variety of unrelated factors. Rest assured, if you need extra time to file your taxes, there is no need to worry about increased audit risk.
Here are some common IRS audit triggers.
If I overpay with an extension, what happens to that overpayment?
If you overpay when filing a tax extension, that overpayment can be refunded when you file your tax return—just like any other overpayment, such as too much tax withheld on Form W-2. Alternatively, it can be carried forward and applied to your first quarter estimated taxes if applicable. We can help ensure that any overpayment is handled correctly, maximizing your benefits and providing you with the best possible outcome.
Do you charge to file my tax extension?
Perhaps you have seen commercials for companies who charge to file an extension. Well, if you are our client and we have your name, address, and tax ID, we file your extension free of charge. We believe in supporting our clients throughout the tax season and offering them peace of mind, so we file tax extensions as a courtesy service to our returning and new clients.
Professional financial services for your peace of mind
At Financial Solution Advisors, we understand that tax season can be a challenging time. Filing an extension can offer you the flexibility and breathing room you need to gather all your necessary tax information accurately. Don’t hesitate to reach out to our team if you have any questions, need assistance in navigating the tax filing process, or need help with your tax planning strategy. We’re here to support you every step of the way.
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