CALL US
(980) 237-1714
Email us
justin@pruscpa.com
Friday 09:00 - 15:00
Mon - Thu 09:00-17:00
Extension season continues…
Estimated Reading Time: 4 minutes 10 seconds
GP CPA recently had an opportunity to speak with Tina Orem, author and journalist at Nerd Wallet, about personal income tax extensions.
While we don’t write as eloquently as Tina, we do speak the same language, taxes. Tina asked some important questions about extensions and what most people consistently get incorrect when it comes to personal income tax extensions. While most of GP CPA’s clients do not need or request extensions at tax time, there are a few clients that we typically need to extend because all or some of their current tax year information is not available by April 15th.
This reason, incomplete or non-available tax information, is the original and most common reason for personal income tax extensions. There are plenty of other reasons that cause the need for extensions, but we are going to list out the “other” reasons for personal income tax extensions and why they are not necessarily good reasons. The difference between a reason and an excuse is actually built into tax law!
- “I think that I/we may owe taxes and I want to extend my personal taxes to provide more time for payment.” This
is an excuse andcreates a penalty/interest situation if monies are actually due to the IRS or state(s). If a personal income tax extension is filed without payment, it may be invalidated or additional penalties assessed when the return is actually filed. Personal income tax extensions DO NOT provide additional time to pay taxes that may be due, they offer additional time to calculate how much tax may or may not be due. Make a payment – any amount, seriously even $1 – with an extension to save yourself trouble and penalties down the road. - “My federal (IRS) extension covers my responsibilities with letting the state I live/work in know that I need more time.” Sure, as long as you don’t live in NC, NY or LA and a few other states. Keep in mind that if you owe state taxes, the extension needs a payment in order to be valid. Automatic state extensions are only automatic if you are expecting a refund!
- “Extended returns are never audited…” Your personal audit risk is dependent on many factors and extensions are likely (it has never been confirmed one way or another with DATA) a very very small factor. The only thing that extensions affect in regards to audit potential, is the amount of time that your return is “under statute” for collections and possible review by the IRS.
If you have any other questions about personal or business income tax extensions, we would love to answer them. Email, carrier pigeon, or the USPS, GP CPA is available. Remember, extensions are not valid (with or without payment) unless filed by April 15th, so don’t be that person that attempts an extension on the due date and gets it wrong!
Related Articles

Starting a Business in North Carolina or South Carolina?
Starting a business is exciting—it’s also a little like setting out on a road trip without a map (or GPS) if you’re not prepared. You might end up in a great place by sheer luck, but chances are, you’ll hit a few dead ends or take longer than necessary to get where you want to go. That’s where we, the CPAs and business advisors, come in handy.

Navigating the Unexpected Closure of Bench: GP CPA, P.C. Is Here to Help
In contrast to Bench, (RIP?), GP CPA, P.C. is a Certified Public Accounting firm located in the Southeastern United States. We are second generation CPAs and business advisors. We can take over for wherever it is that Bench left off and with us, you won’t experience a data hostage situation with our firm.

Don’t Panic: What to Do When You Get a Tax Notice
Picture this: You’re sifting through the mail, dreaming about coffee or a vacation, and then—bam! There it is. An ominous letter from the IRS or your state tax agency. Before you launch into a full-blown panic spiral, let’s talk through what this means and how to handle it. Spoiler alert: ignoring it won’t make it disappear.

Why Waiting Until January to Find a New CPA is Too Late
As a small business owner, managing your financial health is crucial not only for your business but also for your personal wealth. Yet, many business owners make a critical mistake—they wait until January to start searching for a new Certified Public Accountant (CPA).

I received funds from the Restaurant Revitalization Fund (RRF) program, now what do I do with the money?
First off, the funds are expected to be spent before the end of 2021, as an annual report to the SBA will be required at some point in the future. We are still waiting for guidance from the SBA regarding what this annual report will look like. It may make sense to draft a spending plan or budget to make sure all of the funds are spent on time and in accordance with the program rules. GP CPA can help you with this planning, so you can prevent a surprise surplus of funds. Spend wisely and timely!

How to Persuade Clients to Change Banks. Listen to Justin Prusiensky’s Guest Appearance on the Relay Financial Webinar
Our expert accountant Justin Prusiensky was recently interviewed as a guest speaker by Relay Financial to discuss how to persuade clients to change banks.
Comments
0 Comments