File an extension when your situation requires it.

We also had a client who lost her husband in March.  In this sad situation, our client was very distraught and not functioning well at all.  We told her she didn’t have to deal with taxes at the moment, we could file an extension, but she didn’t want to delay.  So she muddled through trying to find all of the information she needed and as part of that, she told us she had paid her estimated taxes. Even though we asked twice for her to find a check to confirm the payments, she insisted she had taken care of it, so based on the information she provided, her return reflected the estimated payments.  We filed her taxes and unfortunately three months later, she received a letter from the IRS that said she owed $1100 in taxes. 

When we reviewed the IRS letter, it showed that she had not paid the estimated taxes and therefore she now owed that amount.  She was upset that she had to pay more taxes, but really what she was doing was paying the taxes that she thought she had paid, but hadn’t.  It took a little bit of time to help her understand the letter, and especially as she was still in a deep state of grief. 

I recommend that if you are dealing with a devastating situation such as this, to put off important decisions, and in this case, I think she would’ve avoided this situation if she had agreed to let us file an extension which would have given her more time to look for the information.