Tax extensions are an additional period of time granted to a tax filer to prepare and file their taxes. In addition to giving a tax filar additional time to file their taxes, a tax extension gives an individual an opportunity to better review their forms prior to filing.
A tax extension gives individuals six extra months to file their taxes. This extension pushes the tax filing deadline from April 15th to October 15th. Requesting a tax extension can aid an individual or couple who realize they are not prepared to file their tax returns by the Internal Revenue Service’s deadline.
Extensions Can Increase Accuracy
Tax extensions have multiple benefits with the first benefit being an increase in the overall accuracy of the tax return. Mistakes can often occur at the height of the hectic tax season leading to delays in processing tax refunds and increasing the chances of being audited.
These mistakes are sometimes attributed to stressed-out filers or rushed accountants and those errors can ultimately cost the tax filer money. Requesting an extension can help ensure that the tax return is accurate making the tax season a smooth one for you and your family.
Extensions Can Save Accountant Fees
Accountant rates tend to increase during tax season and they often spike sharply the week of the filing deadline. Seeking help during the height of the tax season can be costly. Filing for an extension allows taxpayers to save money by giving them an opportunity to consult with an accountant outside of the busy tax season.
Taxpayers can expect to save a significant amount of money in accountant fees if they request an extension moving their tax filing deadline back. These savings can add up with each tax season and become very beneficial.
Most Tax Extensions Are Automatically Approved
Most tax extension requests are honored automatically. Certain people like deployed active duty military members receive extensions without having to file form 4868. Simply make sure your information such as your legal name and social security number are correct. Errors on the form could result in rejections delaying your ability to receive approval quickly or result in a rare rejection.
Tax Extensions Can Reduce Late Penalties
The IRS imposes late penalties when a tax return is filed late without an extension being requested. There are two types of late penalties that can be charged to the taxpayer:
- 5% fee on any tax due for each month or fraction of a month
- Late payment penalty of between 0.5 and 25%.
If you request an extension, you only have to pay one of these fees regardless of how much taxes you owe. If you pay estimated tax when filing your extension, there is generally no penalty at all.
Extensions Can Improve the Accuracy of The Return
When a tax filer is hurrying to meet a looming tax deadline the chances of them making a tax filing mistake increases. Requesting an extension gives you extra time to go over the return to ensure accuracy prior to sending it to the IRS. The extension can provide you with an opportunity to avoid errors and improve the overall accuracy of your tax return.
Extensions Can Preserve Your Tax Refund
There is a three-year deadline for receiving a tax refund check from the IRS if you are owed one. This three-year period begins on the original filing deadline for that tax year which is typically April 15th.
The statute of limitations is extended by six months when an extension is filed for. Even if a taxpayer is behind on submitting tax returns they can benefit from this extension and preserve their ability to receive a tax refund.
Extensions Cut Down on Confusion
The request to file a tax extension signals to the IRS that you are required to file a tax return for the season. This can reduce confusion if you are a person who does not always file a tax return. Requesting a tax extension lets the IRS know that you meet the requirements for filing and avoids some potential issues that might otherwise arise.
Contact Our Tax Controversy Attorneys Today
If you are having issues with audits, IRS collections, or any other tax-related controversies, it’s important that you contact a qualified tax attorney today. The tax controversy attorneys at Wilson Ratledge are here and ready to help. Contact our office today to schedule an initial consultation so we can help guide you through the resolution process with your tax issues.