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Posted by Paul Thomas, CPA on April 17, 2008, 8:10 am
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>I had filled out an extension for my taxes and was not sure how
> important it was to be accurate with it. Because I had estimitated
> certain dollar amounts..how accurate does it need to be at.
It's an estimate. A guess. It does have to be accurate based on the facts
you have at the time you prepare the extension.
So even if you are short and short by a very large margin, you can still
have a valid extension, meaning you won't get a late filing penalty but
you'll get hit with a late payment penalty, because the extension was
prepared using all available data at that time and was reasonable based on
that data.
Take an investment that you're waiting on the K-1 to file your return. In
past years it threw off about a grand in profits and you got about that much
in distributions. This year you got about a grand in distributions, so
there's no valid reason to think the profits from the soon-to-come K-1 would
be much different than in past years. So an extension gets filed. The K-1
comes showing $20k of profits and gains, which is way more than you
anticipated or had reason to suspect. Your extension would still be valid.
--
Paul A. Thomas, CPA
Athens, Georgia
--
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