Hi, I’m Bette Hochberger, CPA, CGMA. Today I will talk about why filing an extension may be good. While some people do not want to deal with extensions, I’m here to tell you some benefits of doing so.
If you can’t file by the deadline (April 18th), the IRS allows taxpayers to file for an extension to October 15 if they need more time to prepare their tax return. The IRS grants them automatically if you complete the proper form on time. You can submit Form 4868 electronically or on paper to file an extension; just make sure you do this before the filing deadline.
Benefits of filing an extension
- Not only will you have six more months to file, but you will also relieve the stress that comes along with trying to pull everything together by tax time. More time and less stress mean you’ll be able to thoroughly review your return and ensure you’re taking advantage of all the tax benefits available. On top of this, you can give yourself time to find an accountant to help out; if needed.
- You’ll also avoid failure-to-file penalties, which can add up to 25% of the tax due. You will only be subject to this penalty if you file an extension but miss the extended deadline. As I’ve mentioned many times before, even though you file an extension, it does not mean you don’t have to pay owed taxes! Make sure to make your payments by the tax filing due date, April 18th.
- Getting an extension can relieve you of the stress of filing in time and allow you to take your time getting your documents in order. You also get a chance to work with your accountant when they can focus more on you and your needs than handling hundreds of clients and trying to finish all taxes by a deadline.
There are many reasons why people cannot file by the deadline. Whether you’re looking for missing papers, going out of town, your schedules are interfering, or just simply procrastinating, it’s best to file an extension. And keep in mind that it is perfectly fine to file this. While you may not get that speedy refund, you’ll avoid all those interest and penalties- which is much more important.
If you need to file an extension, you must accurately complete Form 4868 (or Form 7004 for business tax returns) before the tax filing deadline. There are only five days left until the deadline, so make sure you complete the form before then. You won’t want any consequences to pop up if you don’t do so.
As always, stay safe, and I will see you next time.