Tuesday Tax Tidbit: The Perils of Filing for an Extension

Now that the 2012 tax return deadline is nearly upon us, if you haven’t filed your return yet, you may be thinking about an extension. This allows you to delay filing your return until the applicable extension deadline:

• Individuals — October 15, 2013
• Calendar-year partnerships — September 16, 2013
• Trusts and estates — September 16, 2013

While filing for an extension can provide relief from April 15 deadline stress, it’s important to consider the perils:

• If you expect to owe tax, keep in mind that, to avoid potential interest and penalties, you still must (with a few exceptions) pay any tax due by April 15.
• If you expect a refund, remember that you’re simply extending the amount of time your money is in the government’s pockets rather than your own.

Still, filing for an extension can be tax-smart if you’re missing critical documents or you face unexpected life events that prevent you from devoting sufficient time to your return right now. Please contact your tax advisor if you have questions about avoiding interest and penalties.