Extensions

Will I be penalized for filing an extension?

No. Filing an extension is standard routine process, especially for late-season filers or those with a complex tax situation. 

That said, if you know you will owe, we must post a conservative estimate of your tax due. This means that yes, you should overpay your tax at the time you extend. Failing to do so is the only way you will have penalties from an extension. This must be done each time. 

The deadline is then Oct 15th, but any clients on extension with our firm are all completely done well ahead of that. 

Remember, since filing an extension does require a conservative estimate of taxes to be paid, we do require that we extend at least 2 weeks prior to any major deadline. This gives us enough time to roughly compute what you should post. 

If I have overpaid, will I get a refund? 

Absolutely. The IRS refunds overpayments using the same direct deposit process as any normal return. 

What situations lead to an extension?

Late season filing is the most common reason. If you have not completed your returns by now, you should be open to filing an extension. Most established firms start requesting extensions in the final weeks to the deadline.

Many taxpayers that receive K-1s have to extend just because many partnerships do not send the K-1 form until Aug or Sep. Those with sophisticated returns or those requiring reconciliation work extend, as well. 

Some common cases are clients with a business that do not have their books ready or others with crypto that have not finalized their 8949 forms. 

Another common example is clients that have prior year issues or strategy that must be addressed but are arriving late-season, such as situations with prior year depreciation, cost segregation, wash sales, state tax allocation questions, etc. 

Essentially, if you have a late or complex filing & do not have a plan in-hand with clean books & backup ready-to-file by now, you should post estimates & go on automatic extension. 

If it is so great, how come I have not extended before? 

I have found that many clients are afraid of the extension process through not having done one before. We handle the entire process from end to end, so there is nothing to fear. It actually is highly advantageous to extend because it allows the return to be filed in the less busy period, which opens the door for detailed discussion & tax planning for future years to be completed directly within the context of the same session. 

How does the extension process work at Dimov Tax? 

• Client provides documents
• We will run a rough computation of the return to see if you may possibly owe
• We provide estimated tax amount based on the computation 
• You can post that amount, another amount, or none at all. You can have us post the payment or you can do so yourself online at irs.gov/payments
• You are all set! Then you hang tight until we get to your return

If you need help getting this handled, please contact Dimov Associates at the contact below. We are more than happy to assist.