One common tax myth is the belief that filing for an extension increases your likelihood of being audited by the IRS. This misconception can lead to unnecessary stress and fear around tax filing. Here's what you need to know to stay compliant and avoid these pitfalls.

Origin of the Myth

• Fear of the Unknown: Many taxpayers fear that requesting more time to file might attract unwanted attention from the IRS.

• Misunderstanding IRS Procedures: There is often confusion about how the IRS selects tax returns for audit.

Reality of Filing for an Extension

• No Increased Audit Risk: The IRS has repeatedly stated that filing for an extension does not affect your chances of being audited. Audit selection is based on various factors, but the timing of your filing is not one of them.

• Common Reasons for Extensions: Taxpayers may need more time to gather documents, seek professional advice, or address complex tax situations. Extensions are a routine part of the tax filing process and are used by millions of taxpayers every year.

IRS Guidelines on Filing for an Extension

• Form 4868: Use Form 4868 to request an automatic extension of time to file your federal individual income tax return.

• Extension Deadline: Filing Form 4868 by the regular due date of your return grants you an additional six months to file your tax return.

• Payment Deadline: The extension is for filing your return, not for paying any taxes owed. You must estimate and pay any taxes due by the regular deadline to avoid interest and penalties.

Why the Myth Persists

• General Misconceptions: Many taxpayers believe that any deviation from standard procedures, such as requesting an extension, might trigger an audit.

• Anecdotal Advice: Misleading information and advice from non-professional sources perpetuate the myth.

Avoiding the Pitfall

• Understand the Process: Clearly understand that filing for an extension is a common and accepted practice that does not increase your audit risk.

• Timely Payment: Ensure you pay any estimated taxes owed by the regular deadline to avoid penalties and interest.

What You Need to Do

• File Form 4868: Submit Form 4868 by the regular tax deadline to request an extension.

• Estimate and Pay Taxes: Estimate your tax liability and pay any taxes owed by the regular filing deadline.

• Keep Detailed Records: Maintain accurate records of your extension request and any payments made.

Consulting a Tax Professional

• Seek Professional Advice: Consulting a tax professional can ensure you correctly file for an extension and manage any complex tax situations.

• Accurate Records: A professional can help you maintain proper documentation and navigate the extension process smoothly.