When An Extension Makes Sense back to blog

While most people should file a tax return by April 17th, you have the option of delaying your filing date until Oct. 15 with a tax extension.

When to file an extension

  • Missing or incorrect information. If one of the forms you need to file your return has an error on it, it is often better to receive a corrected form before filing. Posted 4/3/18
  • Re-characterizing Roth IRA rollover amounts. If you’ve rolled funds from a traditional IRA into a Roth IRA, you may want to reverse it later if the investments lose value. This so-called re-characterization process can be done up to the extended tax-filing date of Oct. 15, and in many cases it makes sense to wait until then. Note that 2017 is the last tax year you can use the re-characterization process, which was eliminated for future years by the Tax Cuts and Jobs Act. Posted 4/14/18
  • For self-employed retirement donations. The self-employed can use an extension to buy time to fund an SEP IRA. This extended time frame does not apply to traditional IRAs and Roth IRAs. Posted 4/15/18
  • Avoid late filing penalty. If you fail to file a tax return, two tax penalties come into play: a late filing penalty and a late payment penalty. By filing an extension, you can push out the potential late-filing penalty for another six months even if you cannot yet pay the tax. Posted 4/16/18