Oops! April 15th is here, but your return is not. What to do?

Income tax extensions are an option when your tax return cannot be filed on time. Many people have the mistaken belief that, if they owe taxes, they can file an extension and pay later. This is simply not true.

If you owe taxes, according to the IRS regulations, those taxes are due and payable on the deadline for the original return, normally April 15th. Any late payment, including payments with extended returns filed later, will incur penalties and interest, unless you can show reasonable cause as to why the taxes were paid late.

So, first of all, make sure you understand that the extension of time to file your tax return is not to be construed as an extension of time to pay your taxes. This is a key point, and many people do not understand this concept.

However, filing extensions are quite common and very valid in many instances. You may not have received all your necessary documents to complete your tax return by the April 15th deadline. Or you may have had illnesses and other unforeseen circumstances arise that prevented you from completing the return on time. There are many valid reasons for filing tax return extensions.

Until just a couple of years ago, the extension deadline for the automatic extension you first filed by April 15th was only until August 15th. If you needed additional time, you would file an additional extension request for a valid reason, and this additional extension would give you until October 15th to complete your return.

Now, the automatic extension gives you the full six-month time period to complete the return. This allows you until October 15th to complete your tax return with the automatic extensions now filed.

For businesses, the rules are a little different. Corporations, for example, have their initial filing deadline on March 15th for a calendar-year corporation. If they file an extension, it gives them an additional six months, or until September 15th, to complete their return.

Extensions can be necessary and give you more time to prepare your return accurately. However, just remember, they are not extensions of time to pay taxes due.

Use extensions when necessary for that additional time you need. And, remember, just because the extended return is not due until October 15th, you can certainly complete it early and send it in. That way, you can forget about your taxes until next year, and know that it has been done.