Not Ready To File Your Taxes? Don't Stress Out, File For Extension

With ten days left until Tax Day, taxpayers are already in a panic, compounded by crazy headlines screaming about "last minute" filers and procrastinators. You can tell the folks who write headlines don't generally work with actual taxpayers: if they did, they'd understand that there's a good week or so to go before it's "last minute." For now, it's simply called tax season.

That said, if you are looking at the calendar and like me, you don't anticipate being any closer to filing on time in ten days than you are today, don't panic. You can join the nearly 10 million taxpayers who are expected to file for an automatic extension this year.

Filing for an extension isn't terrible. And don't buy the hype: it isn't an audit trigger. The IRS understands that there are a number of legitimate reasons why taxpayers may need more time to file. One of the most common reasons for filing an extension is owning or participating in a business. Depending on the nature of your entity, tax returns for the business may not even be prepared until March or April. In particular, if the business is a pass-through entity, that could make it tight to account for the Schedules K-1 from a business return on your personal income tax return by April 15.

There may be other reasons: you could be a beneficiary of a trust or estate or a shareholder or partner in a pass through entity which means that Schedules K-1 might not have arrived in your mailbox yet. You might not have received your other tax forms on time. You might still be waiting for a 1099-R. You might be funding an IRA (you have until April 15) and need to include that information on your form 1040.

Elgin pocketwatch (Photo credit: Wikipedia)

Whatever your reason for not being ready to file is yours. You don't need to tell anyone why you're filing for extension – even the IRS – since the extension is granted automatically if you follow the rules.

And again, it doesn't increase your risk of audit or examination. It's always better to file a complete, correct return on extension than a rushed, flawed return by April 15.

You have a lot of options for requesting an extension, ranging from doing it yourself to having someone do it for you. To file for an extension, you can: