Fabulous article, I've been filing blank extensions for years and one of my CPA friends always heckles me about it. You make a great case for cleaning up my act. If I end up with a couple of clients I haven't talked to and I'm worried I'll get in the way of an extension by a new accountant I wait and efile those few at the 11th hour if I can't reach them, but that's a ridiculous burden to put on myself.
Thank you for this very informative and well written article. I was surprised to hear about the Chapter 7 extension of time, valuable information to know. Would the additional time extension be added even if the taxpayer ended up filing on time. Does the act of filing the extension extend the time period no matter the filing date of the return or circumstance.
Yes. One of the three tests is that the BK petition is filed more than three years from the due date. The other tests are more than 2 years from the filing date and more than 240 days from the assessment date.
Thanks. I need to clean up my act. I have lazy client who do not give me the data to make an estimate for the current year. Do I just use the last year's amount?
I ask the client if there are any significant changes or raises, and I usually increase the tax and decrease the withholding from the prior year. It usually takes 5-10 minutes.
Hi thanks for the extension article, very interesting. We have several clients that pay their extension on line. In the past we had a client forget and as I thought they paid on line, i did not file an extension. Obviously, the return and payment were late and there were penalties we had to fight. Since then when a client pays on line, we also file one electronically in case the forget again, at least we protect against a late filed return and only the payment is late. Do you have any problems with sending per se"twice"?
I always file one electronically with the proper estimate and note the e-file acceptance. There is no requirement to pay it for it to be valid. I usually have the taxpayer pay using IRS Direct Pay.
thanks, to be more specific, I want to make sure if the taxpayer DOES pay it on line with Direct Pay and I also file a "protective" extension from our software, that there not any issues with the IRS getting both.
No, there is not. The payment with Direct Pay is not Form 4868 though the IRS treats it as such. The Court has never addressed whether the payment amount is treated as the estimate or how that works.
Fabulous article, I've been filing blank extensions for years and one of my CPA friends always heckles me about it. You make a great case for cleaning up my act. If I end up with a couple of clients I haven't talked to and I'm worried I'll get in the way of an extension by a new accountant I wait and efile those few at the 11th hour if I can't reach them, but that's a ridiculous burden to put on myself.
Jane -- charge more! You are a national expert in tax. :)
I never charge for an extension. Which is dumb, this is a lot of work sometimes. Glad he makes a point of that in this article.
Well stated. Amen on the ridiculous burden. 👍🏻
Always love these tips. Not overly long during tax season, but concise and good tips and examples.
Thank you!
What happens when there is an automatic extension (FEMA for San Diego) for example. Does this extend the statute automatically also for BK?
I don't know if this has been litigated, but a postponement does not change the due date, so I would assume the answer is no.
Thank you!
Thank you for this very informative and well written article. I was surprised to hear about the Chapter 7 extension of time, valuable information to know. Would the additional time extension be added even if the taxpayer ended up filing on time. Does the act of filing the extension extend the time period no matter the filing date of the return or circumstance.
Yes. One of the three tests is that the BK petition is filed more than three years from the due date. The other tests are more than 2 years from the filing date and more than 240 days from the assessment date.
Thanks. I need to clean up my act. I have lazy client who do not give me the data to make an estimate for the current year. Do I just use the last year's amount?
I ask the client if there are any significant changes or raises, and I usually increase the tax and decrease the withholding from the prior year. It usually takes 5-10 minutes.
Hi thanks for the extension article, very interesting. We have several clients that pay their extension on line. In the past we had a client forget and as I thought they paid on line, i did not file an extension. Obviously, the return and payment were late and there were penalties we had to fight. Since then when a client pays on line, we also file one electronically in case the forget again, at least we protect against a late filed return and only the payment is late. Do you have any problems with sending per se"twice"?
I always file one electronically with the proper estimate and note the e-file acceptance. There is no requirement to pay it for it to be valid. I usually have the taxpayer pay using IRS Direct Pay.
thanks, to be more specific, I want to make sure if the taxpayer DOES pay it on line with Direct Pay and I also file a "protective" extension from our software, that there not any issues with the IRS getting both.
No, there is not. The payment with Direct Pay is not Form 4868 though the IRS treats it as such. The Court has never addressed whether the payment amount is treated as the estimate or how that works.