Hi


M

maxed_out41

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.

Thanks in advacanced.
 
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P

Paul Thomas, CPA

maxed_out41 said:
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.
 
M

maxed_out41

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.
What is a K-1 form exactly for? I only made about $1000 or a little
more in a rinky-dink appointment setting company. Would this still
apply? The form looks like it would be for some kind of partnership?
 
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M

Mark Bole

It's just a fancy estimated payment. You aren't signing anything.
What is a K-1 form exactly for? I only made about $1000 or a little
more in a rinky-dink appointment setting company. Would this still
apply? The form looks like it would be for some kind of partnership?

Consult a professional tax preparer.

-Mark Bole
 

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