How to File a Tax Extension

Because April 15th is a Friday this year, April 18th is the official tax deadline for 2016. So if you’re not quite ready to file your taxes by then, it’s time to file a tax extension for your individual tax return.

Whatever accounting help you may need, Books in Balance can help you file your tax extension without penalty. However, please note that extra time to file your taxes does not mean you’ll have extra time to pay. An extension may provide you with six more months (until October 15th) to complete Form 1040, schedules A, B, C, D and E, but you’ll still have to estimate and pay what you owe by April 18th.

Why Should You File a Tax Extension?

Typical reasons for filing a tax extension include:

  • Having a complicated financial situation.
  • Family problems, health issues, or other concerns that are interfering with your life.
  • A partnership or S corporation who has not yet received your K-1 forms. (Note: These are typically due on September 15th with extensions.)
  • Being a chronic procrastinator who has trouble with important deadlines like this one every year. (Believe me… many of my clients file a tax extension because of this.)

How Do You File Your Tax Extension

You can file your extension online with the IRS Free File that’s available only through http://www.IRS.gov. For U.S. Individual Tax Returns, you must e-file Form 4868 or file a paper Tax Form 4868 by mail, or pay all or part of your income tax due with your credit card or debit card using the Electronic Federal Tax Payment System (EFTPS) by midnight on April 18th.

But if you’re a Business or a Corporation, you’ll need to file Form 7004 or Form 1138, respectively. And if you’re in the military, special rules do apply. Ask me for more information.

If you do file an extension by April 18th, the IRS will acknowledge receipt of your form via email. However, if you’re making a payment using an IRS electronic payment option through my services or by yourself, you do not need to submit Form 4868.

Who Can Help Me File a Tax Extension?

I like to say “Don’t try this at home” about tax extensions. Filing a tax extension may seem easy and straightforward, but there are some extenuating circumstances.

That’s why I prefer to file your tax extension so that I can:

  • Ensure that an extension has actually been filed.
  • Note what you paid in estimated taxes.
  • Follow up to provide your pertinent information to file your taxes by October 15th.
  • Make an appointment with you to discuss tax strategies for coming years.

Will Filing An Extension Trigger An Audit?

Probably not. It’s a misconception in accounting circles that filing a tax extension will trigger an audit, but it’s really not true because most audits are random. Or an audit happens because of a “red flag” on your return such as much higher travel costs or client entertainment deductions vs. previous years.

Our Year-Round Services for Tax Clients

Books in Balance offers a wide variety of virtual support services for small and large business clients that can be completely customizable, depending on your needs.

In fact, after April 18th, I’ll have more time to speak to you in depth about your tax planning.

Some of my year-round services include:

  • Accounting System Set-Up
  • Filing Taxes – Individual & Business
  • Bill Paying
  • Personal & Business Tax Preparation
  • Custom Financial Packages

So if you’re thinking about how to file a tax extension, I hope this article was helpful.

Brandon Dante
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