As tax season is approaching people’s worries, tensions, and stress is increasing. In some cases, tax preparation can become a headache due to its complications. You might need more time and space to prepare for the taxes and April 15, is not good enough for you. If you are not able to file taxes in time then you will be late, filing late could mean penalties and fees. This fine could thrive your tax amount. But there is a solution that can help you. If you need more time then you can avail the option of filing for an extension. A tax extension will give you that extra time you need to file for your taxes.
Now, your next worry will be that the process for filing an extension will be very complicated. You don’t have to worry. Because it is a simple and straightforward process and much easier than you think.
How to File Extension
- First of all, you need IRS form 4868. The name of the form is Application for Automatic Extension of Time to File U.S. Income Tax Return.
- There are is no complication in this form and it is a very simple form.
- After getting the form, you need to file out your basic personal information. It includes your name, social security number, your tax details, and your income details
- Once you fill out the form all you have to do is to send it to the address of IRS or you can put it in the IRS box it will reach IRS.
Now the process for the extension is done. However, you have to make sure that all this process takes place before April 15 which is the due date. If you sent the form after the due date, your extension will not be accepted. If it is approved you will get extra 6 months of extension. So, you will get the time, but keep in mind IRS only provides one extension and you will prepare everything within this period.
Please keep in mind that although your return is given an extension, you aren’t granted an expansion on the total amount of money you owe to the IRS. Essentially, you need to get all your taxation paid by the 15th if you would like to avoid penalties and interest. If you cannot make this payment by April 15th, you should notify the IRS and work out an innovative payment plan. In this manner, you can steer clear of any actions taken by the IRS. How strict the IRS will be when collecting such income tax is going to be based on your compliance with the law. In a nutshell, if you’re unable to pay in time, contact the IRS and inform them of your situation.
Advantages
Many advantages come with filing taxes. Extensions provide extra time and can help taxpayers in a lot of ways. Let’s take a look at a few of them.
1. Save You from Penalties
IRS imposes many types of penalties if you are not able to file on time. By filing for an extension, you can save yourself from any such fine. So, if you file your returns before October 15, your extension date then you will not have to pay any fine.
2. Time
Filing can give you extra time in preparing for your tax return. You will get more time for consultations and professional can help you determine that if you are eligible for tax deductions and credits. What decisions are in your best interest and can help you save a lot. Filing an extension provides you additional time to think it over or to get assistance.
3. Improved Accuracy
There is a rush to file taxes on April 15 and many professionals like an accountant can make mistakes due to deadline pressure. These filing mistakes can prove costly and can look bad on your tax records. An extension provides you more leverage and accuracy to file your return in a completely precise manner and nullifying the chances of any mistake.
4. Reduce Your Tax Preparation Fees
During the tax season, the prices of software are increased due to the April deadline, similarly, accounting agencies also spike up their prices during this season, this rate drop downs once the date of April 15 is passed and we approach summers. Many taxpayers who file for the extension can save a lot of money. Another advantage that you will get with an extension is that most accountants will be free and with less workload, they would be able to do your work more attentively.
5. Reducing Your Risk of an Audit
IRS conduct audits in the peak April season, and as the year passes the audits become less. IRS has to conduct certain numbers of audits. But as the year rolls around the chances of the audit comes to zero, especially in October. So, you can save yourself from the audit as well.
Summary
Tax extension and tax preparation both need attention and if you need professional help, SNG INC CPA is a tax return service, Texas that can assist you in all tax and accounting needs. We focus on assisting SMB’s, start-up businesses, individuals. We are one-stop resources for all your accounting problems.