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THE JOYS OF EXTENDING

August 08, 2003

August 15, the first deadline for extended 1040s, looms. Many taxpayers who would rather be sweating on the golf course are instead sweating over their tax records and asking, "why did I do this?"

Some of us, of course, just were too darn busy to get our 1040s done back in April. Others had a much better reason - an extension gives taxpayers more time to fund a pension plan.

Self-employed taxpayers with "SEP" or "Keogh" pension plans have until the extended due date of their returns to make their contributions for the prior year. For example, SEP contributions for 2002 were due on April 15, 2003 for taxpayers who didn't extend, but are due August 15 for extended returns.

CAN I EXTEND AGAIN?

Second extensions, good until October 15, are available via Form 2688. These extensions are not automatic. We have found the IRS generally willing to grant second extensions if they are asked nicely, and if you give them a good reason. While they won't take "I'm too darn busy" as a reason, they are generally understanding when additional time is needed to gather the information required to prepare an accurate return.

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