If your CPA tells you that your return needs to be extended, it’s because additional time is needed to prepare your return so that it’s complete and accurate. You’ll still need to pay any anticipated taxes at the time your return would normally be due (April 18, 2022 for 2021 returns), but your finished return won’t be due until October 15, 2022.
Why you might need to extend
The past two years, the normal tax deadline has been delayed by a few months, so we haven’t had an April 15 deadline since before the pandemic. In many cases, you may still be waiting for additional tax paperwork such as Schedules K-1 and corrected Forms 1099 which are necessary for completing your return.
But that doesn’t mean you should ignore the normal deadline
Go ahead and gather as much of your tax information together as you can now, so that your CPA can draft your return and determine the amount of anticipated tax that should be paid by April 18. Then when you receive the rest of the documents you were waiting on, forward them to your accountant to complete your return.
There are benefits for extending your return
It’s much better to file an extended return than to file a return that is incomplete or for which you haven’t had adequate time to carefully review before you sign. It’s often less expensive and easier to file an extension rather than rushing to prepare your return, then finding out later it had incorrect information requiring an amended return.
Contact your Kindred tax professional for more information on your personal situation.