Well hello boss people!

So, let’s talk about extensions. What comes to mind for you? Well I don’t know about you but what hits me is that I don’t have to pay NOTHING right now. It EXTENDS the time that I don’t have to pay. Procrastinators dream right?

In the minds of the tax world, filing an extension pushes your filing date out 6 months. For individual tax payers, this is October 15th. For your business entity returns, the new due date is September 15th. Whoo Hoo!! A whole six months that you don’t have to pay your taxes!!

HOLD IT!!

No, no, no. Tsk, Tsk. Your tax bill is still due on April the 15th.

Yeah…I know. What on earth is the point of an extension then?? Well, there are actually several reason this could be a good option for you.

Extra Long Spring Break

I don’t know about you but I often dream of leaving for a Spring Vacation…and just never coming back. Well due to work, in some cases vacation or other unforeseen circumstances some taxpayers are simply not going to be back in time for tax season. In this case, an accountant can use what info we have (from you, the taxpayer) in order to make a good estimate on what the taxpayer will owe for the year. That amount will still need to paid on April 15th. When the vacationer finally comes home, then we can get the rest of the crucial details to file an official return. We’re not mad at you though. Go ahead and live your best life!

Investments

Another reason this could be useful is if someone has a lot of investments. Some taxpayers used their finances wisely by investing in various companies, acquiring some ownership in them. They will be receiving quite a bit of K-1s. These document how much profit and loss they generated in their investments. That being said, sometimes those investment companies file for extension to file their taxes and deliver their K-1s. Another reason those K-1s might not be done in time is due to weird fiscal year ends. It just makes logical sense that the taxpayer would wait to receive those K-1s before they file for their taxes.

Besides the two reasons mentioned above their are special extensions granted to those serving in the military as well. That however is a whole new list of due dates all depending on when they get back into the US. There’s also some instances where client financials are not done in time to file the business taxes.

I hope this helps by giving a basic understanding of what extensions are!

Have an awesome week!