Tax Tip of the Week | No. 350 | It is Better to Extend vs. Not Filing on Time

Tax Tip of the Week | April 13, 2016 | No. 350 | It is Better to Extend vs. Not Filing on Time

Filing for ExtensionsIf you haven’t filed your tax return by now, you should probably consider filing for an extension.  It is a lot easier to file for an extension than it is to amend a return later for a mistake you made trying to rush your return to completion.  Even more costly is if the IRS finds a mistake you made and assesses underpayment penalties and interest.To file for an extension, you simply need to submit Form 4868. After submitting this form, you now have until October 17, 2016 to timely file your return.  Note, however, an extension of time to file is not an extension of time to pay.  If you suspect you will owe some taxes, you must send a payment along with the extension.  This is true for your federal, state and city returns.Ohio will automatically accept the federal extension. Some cities, however, require a special city extension form.  Also, some cities will not allow extensions if you only have W2 income.  Be sure to check with your work and/or resident cities before April 15th.Another reason to file for extension is that some speculate your chances for an audit decreases for extended returns.  How? One of the methods the IRS uses to select a return for audit is to select a random sample of returns filed by April 15th (April 18th this year).   If your return is not in that sample—then you don’t get picked!Editor’s Note:  One of the pledges I make to all my clients is that my personal return will be the last one filed each year. When my most procrastinating client’s return is filed on October 17th ----mine is right behind it!  And has been that way for nearly 20 years!You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.Rick Prewitt – the guy behind TTW...until next week.