4 Myths About Filing Your Taxes After April 15th
April 13, 2018Every year around tax time when I’m talking with people about filing their taxes on time, I’m reminded of an old friend of mine who, no matter what, always extended his taxes. He was always due a refund, but he just never got it together in time to file by the April deadline. It confounded me — why wouldn’t he want to get his refund ASAP? He just laughed it off and chalked it up to procrastination. I chalk it up to diff’rent strokes for diff’rent folks.
Most people who delay filing have better reasons than procrastination: they’re still waiting on something, they thought they could do their own but realized too late they needed a pro, etc. Whatever the reason, here are a few myths I’ve heard about the US tax deadline, along with the truth.
Myth #1: Extending your return due date means you’re filing late
This is decidedly untrue — as long as you let the IRS know by filing Form 4868 that you’re putting it off, you’re not considered late. It’s like the difference between an excused absence and unexcused — often an excused absence just means you made sure the authority keeping attendance knew you wouldn’t be there, and then you’re excused.
You’re considered late (and therefore could be assessed a late filing penalty) if:
- You don’t file Form 4868 by midnight on the April filing deadline
- You file 4868 on time, but then fail to actually file your return by October 15th, which is the final deadline, no matter what
Myth #2: Extending your return due date means you don’t have to pay until later
This is probably the biggest mistake people make. Filing an extension request gives you 6 more months to turn your form in, but if you end up owing anything at that point, you’ll pay a late fee and interest.
How do you know how much you’ll owe if you don’t have all the information?
Great question. You’ll need to make your best estimate, erring on the side of over-paying, in order to avoid the penalties. Let’s say, for example, you’re extending because you’re still waiting on a corrected W-2 from your employer. You can use your last paycheck stub of the prior year to fill out a draft of your tax return, while using all of the other information you have, to see what your projected payment due might be.
The bad news is that while the IRS expects you to pay them on time even if you file late, they won’t be sending you your refund until you send in your final return.
Myth #3: You have to have a valid reason to request an extension
Nope, you can extend just because you like to be late. But you do have to submit that form to formally request it.
Myth #4: Filing later is a red flag for audit
Untrue. In fact, it’s a commonly held belief in the CPA world that filing an extension may actually reduce your chances for a random audit, since those types of audit can be determined on a first-come, first-served basis. That doesn’t mean you won’t ever be audited, particularly if you have other potential red flags on your return, but requesting an extension does not rouse suspicion with the IRS.
The most important point about filing after the April tax deadline
If you only remember one thing when it comes to filing and paying your taxes, it’s that any balance you may owe the IRS on taxes for the prior year will always be due by April 15th (or whatever date you’re required to file that year), no matter when you submit the supporting tax return. Beyond that, if you’re expecting a refund and decide to delay your filing until after the April due date, that’s fine, just make sure you submit the form. The IRS will assess a late filing penalty if you didn’t officially notify them of your need for extension (in other words, you’ll suffer for unexcused absences).