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WHAT EXTENDS, WHAT DOESN'T
April 14, 2008
Everyone knows that tomorrow is the deadline for filing your 1040. Most taxpayers are probably aware that you can extend this deadline six months with Form 4868. You can extend other returns due today for six more months too. Form 7004 extends both Form 1041, the estate and trust return, and Form 1065, the partenrship return.
Extending your tax return extends some other important deadlines for six months, including:
- Funding a 2007 qualified pension or profit-sharing plan contribution, including a Keogh plan.
- Establishing and funding a SEP, or Simplified Employee Pension.
- Recharacterizing a Roth IRA contribution as a regular IRA contribution.
- Withdrawing excess IRA contributions for 2007.
- Filing Form 3115 under an automatic procedure for changing accounting methods.
- Many elections, such as the partnership "Section 754" election to step up the basis of assets after a sale of partnership interest, are timely when made on an extended return.
Folks with section 1031 like-kind exchanges entered into after October 18 of last year can get extra time to close the acquisition of replacement property, but the extended deadline is 180 days after the old property was given up - not 180 days from April 15.
Some deadlines aren't extended at all with a return extension. A few examples where April 15 is the do-or-die deadline:
- Paying your federal tax due for 2007 (though no penalties, only interest, will accrue if you are 90% paid in when you extend your 1040).
- Funding an Individual Retirement Account for 2007
- Funding a Health Savings Account for 2007
- Paying your first quarter federal estimated tax for 2008
- Making a Section 475 "mark-to-market" election for securities trading.
So: extensions get you more than just time to get your return right. They can also help with cash management. But be careful about what can't get extended, and act accordingly.
This is the penultimate installment in our daily series of 2008 filing season tips, and perhaps the ultimate opportunity to use the word penultimate here.
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Comments
Extending the return is not necessary to extend the Form 3115 deadline to the extended filing deadline since an amended (superseding) return can generally be filed before the extended deadline to make the method change.
Posted by: Brian | April 14, 2008 3:34 PM