Although an extension can help reduce penalties and help you find more deductions, any outstanding balance will still be charged with a late payment penalty (0.5% per month) and interest (right now at 3% annually.) An Extension Won't Give Married Couples Extra Time to Switch from Joint to Separate Returns Extra Time to File Doesn't Mean Extra Time to PayĪn extension will provide you with additional filing time, but if you owe taxes, it is still due by the original deadline. If you are considering filing for a tax extension, make sure you are aware of the downfalls. The Downfalls of Filing for a Tax ExtensionĪlthough requesting a filing extension for some people may be a benefit, for others an extension may not actually be a good option. Having a tax extension also provides you additional time to make various elections on your tax return, as well as preserve your tax refunds if you file after the extended deadline. Filing your taxes with an accountant at that time could cost you much less. They tend to lower their prices significantly in the late spring and summertime. Most accountants maintain higher prices during tax season and hike up their prices even more on the week of the deadline. Filing for an extension can help you avoid the mad rush and will allow you to take your time and make sure your taxes are filed correctly. During the tax season rush, many accountants will be overwhelmed and may miss important deductions that could save you money. Accountants and taxpayers are both extremely busy during tax season, and it is possible for mistakes to be made. Having more time to file can improve the accuracy of your return. This is a great option for people that are self-employed.
You also get a chance to work with your accountant at a time when they can focus more on you and your needs as opposed to handling hundreds of clients, and trying to finish all taxes by a deadline. Getting an extension can not only relieve you of the stress to file in time, but it can also allow you to take your time getting your documents in order.
Due to this, you, or your accountant, may end up making tax filing mistakes. Improve Your Tax Filing AccuracyĪfter the start of the New Year, tax season begins, and it can feel like everyone is rushing to file their taxes by the deadline. If you ask for an extension, you may be able to avoid accruing any late penalties. This doesn't mean you will always have to pay late fees. It is understandable if you are falling behind and will be unable to file your taxes on time for any reason at all. IRS imposes late penalties for not filing taxes on time. Here are some reasons you might want to consider applying for a tax extension this year: Avoid Late Penalties Sending a request for a tax-filing extension can have many benefits. The Benefits of Filing for a Tax Extension Filing an extension is free, very easy to obtain, and the IRS will allow you up to 6 months to complete your taxes.īut is it wise to file for a tax extension? We're sharing the benefits and downfalls of filing for a tax extension to help you make your decision. There are several reasons why filing for a tax extension would be beneficial for anyone.
Tax extensions are not just for people who are running late in filing their taxes. Many people don't know that they can request a tax-filing extension from the IRS to ask for additional time to file tax returns.
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