No matter how diligent of a tax filer you are, there still remains the off chance that you will encounter some difficulty when filing your return. A missing receipt, W-2 or 1099 could prevent you from filing a complete and accurate return. If you’re faced with such a situation, the only two choices you have are to either file an extension or an amended return, and your choice will surely determine your processing timeline and filing experience.
The purpose of filing an amended return is to correct an error on a previously filed 1040, 1040A or 1040EZ. According to the Internal Revenue Service, most taxpayers file amended returns to correct math errors on their original tax returns. In contrast, the purpose of filing an extension is to give yourself more time to file your tax return.
An extension of time to file is not an extension of time to pay, so don’t file an extension if your only reason for filing is to delay making a payment to the IRS. If you owe and can’t afford to pay, file your return on time and pay as much as you can. Once you’ve submitted your return, apply for an online payment agreement, which will allow you to make monthly payments until your tax debt is paid in full. You will owe penalties and interest on the tax due until the amount is paid in full.
An amended return cannot be filed electronically and takes 8 to 12 weeks to process, whereas an extension is filed electronically by submitting IRS form 4868 using e-file software. Generally the IRS cannot extend the due date of your return for longer than 6 months. This means a return that was originally due on April 15th will be due on October 15th.
Unless you've already filed an original return and that return has wrong or incomplete information, it is usually best to file an extension so that you can file a complete and accurate return within the 6-month grace period afforded by the extension. During that period, you will still be assessed a failure to pay penalty if you owe, but not a failure-to-file penalty. You will be assessed both penalties if you file an incomplete return and the amended return you file later reflects a tax balance due.
Denise Caldwell is a finance writer who has been writing on taxation and finance since 2006. Her articles appear regularly on websites such as Gomestic.com and MoneyNing.com. She has taken what she learned while working at the IRS to provide readers with helpful tax and finance tips. Caldwell received a Bachelor of Arts in political science from Howard University.