Filing your taxes Oct. 15? Here's what you need to know

For most Americans, tax day came and went on April 18. However, for many financial and tax advisors whose clients requested a six-month filing extension, Oct. 15 is tax day all over again.

People apply for tax extensions for a variety of reasons, but financial advisors who work with affluent families and individuals most often see clients requesting extensions due to the sheer complexity of their returns. High-net-worth individuals typically have highly diversified investment portfolios, making it virtually impossible for them to get all the information needed to file an accurate return in April.

However, filing an extension doesn't mean you don't have to pay anything until October. A tax extension gives you more time to file, but not more time to pay. Every U.S. citizen must pay their tax liability by the April deadline, regardless of whether they request an extension.

For many Americans, waiting until October to file is often necessary to ensure the accuracy of their returns. If someone is involved in 150 partnerships, for example, the odds of all 150 of those partnerships having their documents in order by April are slim to none. In those cases, tax advisors use the data they have in order to make a best-guess estimate of an individual's tax liability. As the year goes on, the information needed to file begins to trickle in as the client's partnerships and investment entities file their tax returns.

Additionally, certain elections must be designated on a timely filed tax return.

For example, individuals with foreign investments need to make certain elections regarding the recognition of income on their tax returns, which must be made on a timely filed return. This often means they cannot file in April, because they simply don't have the data they need in order to make a timely election.

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