How filing tax extensions is a lot like making your own matzoh
A reprint from 2012 of one of our most popular posts with the tax season just being over and Passover coming this Friday....
I was talking to one of my clients the other day who wanted to know why I need to charge $100 to file an extension, since it's such a simple form.
My response was that you could say that about almost anything that I do is simple, but you also need to realize the care that I need to follow, and that's expected of me. Many taxpayers do not realize, but for the extension to be valid, you need to make a good faith estimate of the amount, of tax owed on the return. So, to do this, I need to make inquiries as to where we stand so far. In addition, I then have to ascertain if any estimates were made Then, before I can actually file the extension,
I also need to ascertain how much you, the taxpayer, actually want to pay in , since an Application for Extension is an extension of time to FILE your taxes, and is NOT an extension of time to PAY your taxes. Once you've decided how much you wish to pay with the extension, I normally would then instruct you to make a check payable to the US Treasury and to mail, scan, or fax me that check.
I will then 'electronically' attach that check to the Extension so that the IRS will get the payment timely. One of the advantages that I have in filing extensions is that they all get filed electronically, and that I will get an electronic acceptance from the IRS as positive proof the extension was made. I also do incur some out of pocket costs with my software provider to make all this happen.
So, suddenly, the preparation of an extension doesn't sound so 'simple' anymore, does it? So what does this have to do with matzo...? Well, about the extent of my being a 'good jew' is I eat matzo on Passover. Well, my girlfriend (who in 2019 is now my beautiful wife), Karen, who is not jewish (but probably acts it more than me!) insists that we not eat the store bought matzo, because she says they taste like flat cardboard.
So, Karen finds her own recipe, a la Mark Bittman's recipe, and she heats the oven to 500 degrees, and is mixing the flour with the kosher salt and a little olive oil, laying each slice out with a rolling pin, and individually making them about 3 or 4 at a time (delicious by the way). There are not many people willing to take the time to make their own matzo. And as we talk about it, Karen comments that she doesn't understand this, because it is so 'simple', even if it took her at least three tries to get it right, from how long the dough mixes to how long you leave the matzo in the oven, to when to put the holes in the matzo, so they don't totally blow up on you.
It's as 'simple' as filing your own tax extension. I hope I've made my point. You can contact me if you'd like more information about making sure your tax extension has been done right. If you want Karen's Matzo recipe, let me know!
Copyright Information 2019 Professional Association of Small Business Accountants
Presented by Steven A Feinberg, CPA of Appletree Business Services LLC, a PASBA member accountant, located in Londonderry, New Hampshire. Steve has more than thirty years experience in Federal and New Hampshire issues, specializing in small business general, tax and payroll matters. For additional information on these and other current business and tax issues, email Steve at email@example.com or call (603) 434-2775.