Avoid worry and the chaos of tax season by filing an extension on your taxes. Here are 12 reasons why you should request an income tax extension.
1. It’s Simple, and Easy To Do
Filing a tax extension is easy to do, and if you get it, you will have less chance of being audited by the IRS. Extensions can be filed online or by mailing Form 4868 to the IRS.
2. You Need to Work on Your Tax Return
All tax returns must be filed by April 15. If you are still working on your tax return and deciding whether to use standard or itemized deductions, then file for an extension. You can receive an extension of 6 months and work on your taxes some more. However, you still need to pay your estimated taxes by April 15.
3. Unexpected Life Events
Sometimes, life will throw curve balls that can make it difficult for you to get your taxes filed by the April deadline. From a death in the family to getting the flu, it’s possible that something unexpected could pop up in your life. And these events can make it difficult to complete your tax filing by the due date.
The good news is that the IRS does not even require an explanation for applying for an extension, so there’s no need to stress and rush yourself if you’re going through one of life’s curve balls.
4. Your Tax Documentation is Incomplete
There are many reasons why your documentation may be incomplete by the original April due date to file your taxes. From losing your forms to moving to a different address, it can be anything.
It’s also better to ensure the accuracy of your tax documentation by taking extra time to get the documents you need. This can be quickly done by filing an extension. Remember, And getting those additional six months can spare you some future headache.
5. You’re Still Waiting For Tax Forms
Whether you’re waiting for your K-1 tax form or you lost your W-2 form and are waiting for a new one sent by your employer, it’s better to be safe than sorry. By filing an extension, you can have more time to complete your tax documentation.
6. The Possibility To Take Advantage of New Laws
Laws are constantly changing, especially for taxes. By filing an extension, it’s possible that there could be a new tax law that would take place that you could take advantage of or use.
7. Reduce Tax Accountant Fees
Most tax accountants charge a higher fee during tax season leading up to the April deadline than the slower summer months. So, why not just file an extension and save money on your accountant. This also ensures that your accountant will have more time to focus on you as they’re not going to be as busy later.
8. A Tax Extension Will Preserve Your Tax Refunds
There is currently a three-year deadline for receiving your refund if owed one by the IRS. Also, this deadline starts on the April date of the year that those taxes were to be filed. However, you can extend it by six months if you file a tax extension.
9. You Got Married Recently
If you’re a newlywed, it may take some extra time to fully understand how to file your taxes as a married person. Also, you still have to discuss in-depth with your spouse how you will file. It’s best to file an extension so you can correctly accomplish all the tax forms.
10. You Got A Divorce Recently
A lot of people get divorced. But after being used to filing taxes in a marriage, you may not know or be able to file their returns correctly. Also, divorce tends to be a stressful and difficult time to go through. It’s entirely understandable for focus more on your emotional needs now as opposed to filing your taxes. So why not just file for an extension?
11. You’re Self Employed
If you’re self-employed, you’ll probably want to file for an extension. An extension could give you extra time to fund your retirement plan which can be filed through SEP-IRAs, solo 401(k)s, or SIMPLE-IRAs. While these should be set up during the tax year, it is legal to continue funding them up til the extended deadline.
Plus, if you’re self-employed, you’re probably more worried about spending your time hustling your coins together than sitting down to file your taxes, and an extension could give you that extra time you need.
12. You’re A Procrastinator
The IRS does not even require a reason to file an extension. So if you’re someone who loves to procrastinate, there’s no reason not to go ahead and file an extension.
It’s better to file an extension and complete it later before your extended due date than to end up having to file late and getting charged with penalties by the IRS.