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Did you know that the Internal Revenue Service, IRS, allows taxpayers to file for a six-month extension if they need more time to prepare their tax return?
As long as you fill out Form 4668 on time, the IRS will grant you an extension. If you do want to file an extension make sure you check your state tax laws, since some states require you to file a separate state extension form. It is important to understand that by filing for an extension, it gives you more time to file, not more time to pay. Here are three reasons why you may need to file a tax extension this year.
Lost Documentation
If you are in a situation where you have lost your W-2 or are unable to find all the proper information to fully complete your taxes, ask for an extension. Or maybe you own a small business and are waiting for a letter of charitable contribution, if you are unsure when you will have all the proper documentation, file an extension. If you think you will owe taxes, be sure to make a payment with your extension to avoid any penalties and fees.
Unexpected life events
Death or illness in your family, natural disasters or other unexpected life events all warrant a tax extension. Even if you had planned on filing your return on time, there is no need to rush. This is a great way to make sure that you avoid an overwhelming amount of stress and chaos as well as avoid any possible mistakes when filing your taxes.
Audit Roulette
Did you know that a tax extension could lower you chances of being audited? IRS agents are required to audit a certain number of tax returns each year. Since they usually fill their quota by the filing deadline you have a lower percentage of being audited if you file an extension. This doesn’t mean that you can’t or won’t get audited, but it’s more likely you won’t.
Although these are some of the reasons you should consider filing for an extension, the IRS doesn’t need a reason. If you need more time, than you should file for an extension. However, don’t forget to send in your payment with your extension; just because you file for an extension doesn’t mean you don’t owe the payment on time. If you are unsure about where you stand on your taxes and need professional advice, reach out to your Concord NC CPA for tax time advice and services.[/vc_column_text][/vc_column][/vc_row]