If you can’t pay your taxes by this year’s April 18th deadline, you can always request a 60- to 120-day extension to pay. Don’t forget about asking your local certified public accountant and tax preparation specialist about the benefits. You may still be charged penalties and interest but at a lower rate. The IRS also offers installment agreements that allow set payments each month.
Filing for an extension gives you until October to finish up your taxes. Also, it helps you avoid failure-to-file penalties, which can add up to a quarter of your due taxes! If any retroactive tax changes occur after April, then you will be able to use them without having to change your already-filed taxes.
Seven Reasons to Do an Extension
Missing information. Maybe you just can’t find all the correct forms to fill out an accurate tax return. Or, maybe you haven’t gotten all the forms. Forms like the Schedule K-1 or Form 1099 often arrive late because the companies that filed them had requested their own filing extension.
Incorrect forms. It isn’t too unusual for companies to make a mistake when sending out 1099s that report interest, capital gains, sale proceeds and dividends. They may even send you a notice that a corrected 1099 is on its way. If so, wait until you get it before filing your return.
Snowbirds. Seniors who spend the colder months away from their primary residences may also receive necessary forms by April 18. If that’s not until April or later, these taxpayers may want to file an extension rather than rush their tax returns.
Major life event. Going through a tough time, such as a divorce, a family member’s death, a job loss or major medical issue? Then maybe doing your taxes may not be your top priority. File for an extension and do your taxes when things get a little easier.
Busy tax pro. If you depend on a tax professional to file your return, you may find that they are too busy at this point in the year. Instead, have your pro handle the return after the stress lifts a little.
Procrastinating
If you’re someone who hasn’t gotten your papers together and probably won’t before the deadline—you know who you are—request an extension. That way, you can delay your tax return all-nighter until October.
Who doesn’t need to request an extension
Those who live and work abroad, including military members on duty outside the U.S., automatically have an extra two months to file. Servicemen and others serving in combat zones typically have 180 days after they leave the combat zone to file returns. Taxpayers affected by tornadoes, floods, hurricanes and other natural disasters may be eligible for an automatic extension as well.
Looking for a remedy to your tax preparation stress? Call Williams & Kunkel CPA today in Flower Mound at 972-446-1040 to have a chat.
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Source: The Fiscal Times