Sunday, March 08, 2015

3 Reasons You Shouuld File a Tax Extension #taxtime #taxextension

When tax season rolls around, it is time to start the process of filing your final return. Is this stressful? Most of the time. Is this something you want to do? Probably not.

Even though you want nothing more than to put this behind you for another year, you can’t do so until you file all the necessary returns with the appropriate authorities.

Do you need more time to prepare your individual federal tax return? If so, the IRS is more than willing to accommodate your situation. Thispage of the IRS website details the finer details of requesting an extension to file your tax return.

Note: just because you request an extension of time to file does not mean you have more time to pay any tax liability.

Here is what the IRS has to say about the process:

“If you are not able to file your federal individual income tax return by the due date, you may be able to get an automatic 6-month extension of time to file. To do so, you must file Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return by the due date for filing your calendar year return (usually April 15) or fiscal year return.”

While most people file their return on time, some require an extension for one reason or another. Here are three of the top reasons to file a tax extension:
  • You don’t have all information required to file. For example, you may be waiting for documentation of a large charitable contribution. Rather than file and have to amend your return at a later date, you can simply opt for an extension until you have all the necessary paperwork.
  • You have been hit with an emergency. Have you suffered an injury? Is somebody in your family going through a difficult time in regards to their health? Have you been called out of the country for work for an extended period of time?
Dealing with an emergency can take a lot of time and resources. Subsequently, you may not have the time to file your tax return by the deadline.

You require more time to change a retirement plan or make contributions.  Did you know some retirement plans, such as a traditional IRA, can be funded in the year after the previous tax year? Details like this may push back your intentions of filing on time, thus leading to an extension.

Final Note
The information above is geared toward extensions for individuals. The IRS offers the same to corporations and partnerships. Form 7004 and Form 1138 can provide you with more information.
In a perfect world, you will be able to file your tax return by the deadline. If something holds you back from doing so, don’t shy away from filing an extension.

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