John M. Hoffman & Associates CPAs
Extending those tax filings?
Please be reminded that April 15 of 2016 falls on
In order to prepare your automatic extension
request, please give us adequate time to do an accurate estimate and to prepare
the extension requests.
Most extension payments are made electronically
via electronic debit. In fact, Massachusetts requires that extension payments of
$5,000 or more be made in that way (they claim they will not accept your
extension payment greater than $5,000 if made by check).
If you think you are going to owe sizeable money
with your extension, please let us know that in advance.
If you are going to owe money, please DO NOT WAIT
until the last minute to make sure
that your funds are ready for transfer.
We like to submit the extension request enough in
advance such that should there be some problem, we have sufficient time to
attempt to resubmit.
Do not forget that an extension, is an extension
of time to file and not an extension of time to pay. If you owe money beyond
what is paid with the extension request, the IRS will charge you interest at
some floating rate as well as a penalty of Ĺ of 1% per month. This makes the
effective non-deductible charge for being late with your payment approximately
15% on an annualized basis.
If you owe money, we suggest that you pay it with
your extension request (if you can). If you donít have the money for both the
federal and the state we generally recommend paying something to both and
whenever possible trying to get at least 80% of the tax paid into the state. The
state (Massachusetts at least) is real fussy about not having paid in 80% of the
ultimate tax with the extension and they generally assess extra penalties that
can be painful.
We always tell people that
we do not mind preparing returns on extension.
There is less
chance for after the fact information or corrected information to come in.
It gives us work
to do the rest of the year. This is a legitimate issue for the tax
We are for
certain the best trained on the current year tax matters as we have just
gone through a whole season of preparing returns. Any nuances that the new
year brought to us have certainly been worked out of the system.
The automatic extension is a six month extension
until October 15. This does not mean that you should not think about gathering
your remaining tax materials until late September. We suggest that you try to
get everything you can to us as soon as possible. If you are waiting for a K-1
from an S corporation or a partnership, consider getting us all the remaining
materials; we can easily add the K-1 form at the last minute.