There’s this idea floating around that if you file an extension, its a “bad thing” or that the IRS is going to come knocking. Not true. Extensions are a perfectly legal, common part of tax planning. In fact, filing one can actually save you time, money, and stress.
- More time = better accuracy – Rushing to file increases the risk of errors, missed deductions, or even forgetting key documents. An extension gives you six more months to file a complete and accurate return.
- ️Strategic planning – If you’re waiting on a K-1, tying up year-end bookkeeping, or exploring tax strategies, the extension gives you breathing room to do it right.
- Possibly More Control Over Cash Flow – May 401k plans allow a business to take a tax deduction in the current year for employer contributions, but not actually remit the funds until they file their corporate tax return (including extension). This allows businesses to time when they distribute the cash & gives them more control.
- Peace of mind – The IRS doesn’t view extensions negatively. It’s far better to file an extension than to file something incomplete and amend it later.
Just remember: An extension to file is not an extension to pay. If you owe, you still need to estimate and pay by 4/15 to avoid penalties.
