Are you feeling stressed and overwhelmed by the approaching tax deadline? Filing for an extension might be just the right step to avoid costly mistakes, maximize deductions and plan efficiently to reduce your stress levels...

  • Filing for an extension can give you more time to gather all the necessary documents for your tax return and avoid failure-to-file penalties.
  • Extending the deadline allows you more time to explore potential tax deductions and credits, potentially resulting in a larger tax refund or lower tax bill.
  • An extension can help alleviate stress and supply the necessary time to prepare your return accurately and efficiently.
  • It is your legal right to request an extension, and there are no added costs or penalties associated with it, making it a smart choice for those who need more time to prepare their return.
  • Remember to pay as much as you expect to owe by the original due (4/15/Every year) date to avoid interest charges and penalties for underpayment of taxes.
  • Complete your tax return as soon as possible after filing for an extension to avoid any potential issues or delays.

The deadline for filing a tax return is April 15th, unless there are holidays, and you may feel the pressure to complete everything on time. An extension is a form filed with the IRS (Internal Revenue Service) to request an extra 6 months to file your return. This extends the due date from April 15 to Oct 15 for your personal tax returns. However, it is important to understand that an extension to file does not imply an extension to pay. The taxes owed should still be paid on or before the April 15th deadline. In some states, filing an extension with the IRS will automatically extend the time to file a state income tax return. It is advisable to review the state tax laws as some states accept IRS (Internal Revenue Service) extensions, while others require the filing of a separate state extension form. An automatic extension of time to file the tax return can be obtained by electronically filing Form 4868. Once the transaction is completed, an electronic acknowledgment will be received. Although it may appear troublesome, there are several reasons why considering an extension of the deadline is worthwhile...

1. More time to gather all the necessary documents.

Filing for an extension provides you with more time to gather all the necessary documents for your tax return, such as Schedule K-1 or Form 1099. This extended time can be particularly beneficial if you are self-employed or have multiple sources of income. It allows you to thoroughly complete and verify your tax return, ensuring that you have all the required documents for accurate filing. Additionally, by filing an extension, you can avoid incurring failure-to-file penalties, which can amount to 25% of the tax owed.

2. Avoid errors and potential penalties.

In addition to providing you with more time to gather documents, filing for an extension can also help you avoid errors and potential penalties. When you rush to complete your tax return before the deadline, there is a greater chance of making mistakes or overlooking crucial details. Certain financial institutions and companies often send your 1099s after undergoing corrections and revisions, especially if you have multiple investments. It is more helpful to wait for these documents rather than hastily filing your returns. The duration of these extensions typically ranges from 30 days (approximately 4 and a half weeks) to six months, depending on the type of return.

3. Time to explore potential tax deductions and credits.

You also have more time to explore potential tax deductions and credits that you may have missed if you had rushed to complete your return before the deadline. Meanwhile, your CPA can devise efficient tax planning and strategies by focusing on your unique situation. This can lead to a larger tax refund or a lower tax bill, making the extra time and effort well worth it.

4. More time to breathe and prepare.

You can remove some of the pressure on yourself and grant yourself more time to relax and prepare your return without feeling rushed. This can aid you in avoiding burnout and guaranteeing that you are in the best mindset to complete your tax return accurately and efficiently.

5. Legal right to an extension.

An extension of time to file the tax is legally granted to those who request it. The government does not charge you for requesting an extension, which means you can take advantage of the choice to extend your tax return without incurring any added costs or penalties. This makes it a smart choice for anyone who needs more time to prepare their return. Why refrain from exercising your right when it is the obvious smart choice?

What Are The Primary Benefits Of Extending You Tax Return?
  1. Some people do not have a choice because they will have to wait for their business/investment returns to be done before they can even file their return.
  2. It gives you extra time to make some important elections if you missed filing the return by the original deadline.
  3. It also gives you extra time to fund your retirement plans (not just IRAs, but others such as SEP IRA).
  4. If you extend your return, you might be able to supersede it without needing to amend it. This means that if you missed something or made an error, you can simply supersede the original return within the extra 6 months you have.
  5. Filing an extension preserves your ability to receive a tax refund even when you file past the extension due date. Filers have three years from the date of the original due date (e.g., April 15, 2019) to claim a tax refund. However, if you file for an extension, you will have an additional six months to claim your refund. In other words, the statute of limitations for refunds is also extended.
Am I More Likely To Be Audited If I Extend?

Extending your tax deadline will not raise the chances of being audited by the IRS. Opting for an extension is a wiser choice compared to submitting an incomplete or hastily reviewed tax return.

Should I Do Anything Differently If I Am Filing An Extension Or “going On Extension”?

No, you should still give your CPA whatever information you have as early as possible or as soon as it becomes available. You should expect to pay any anticipated taxes owed by April 15. You still need to submit all available tax information to your CPA promptly so that they can determine if you will have a balance due or if you can expect are fund.

How Do I File For A Tax Extension?

When you file for an extension, you will need to send Form 4868 by the original tax deadline. This form will give you an additional six months to file your return. It is important to note that while filing for an extension can be helpful, it is still important to complete your tax return as soon as possible to avoid any potential issues or delays.

Please note that filing an extension does not extend the time you have to pay your taxes. You should still pay as much as you expect to owe, on or before the actual due date. You should pay 90% or more of the tax that you owed for the taxable year or 100% of the tax that you owed for the prior year, whichever amount is less. If you underpay your tax, you will incur interest charges from the original due date until you pay the tax and interest in full. You could also be subject to penalties but may be able to obtain relief for “reasonable cause” or for reporting your income with reasonable accuracy on your extension request form.

Investor Friendly CPA® is designed to supply resources and support for individuals filing taxes. Our experienced team understands the importance of proper tax planning, which is why we offer a variety of resources and tools to help our clients navigate the complexities of tax season and make informed decisions about their tax filings.

Below Are Ways Our Team Can Aid You In Correctly Completing Your Taxes So You Can File With Confidence.
  • Be an informed tax planner.

One way Investor Friendly CPA® can aid in achieving the benefits is by supplying educational resources and information about tax planning. Our team of experts can help clients understand the tax implications of real estate investments and supply guidance on how to maximize deductions and credits and help avoid penalties and errors.

  • Track expenses, income, and deductions.

Another way Investor Friendly CPA® can help is by supplying tools and resources to help our clients track their expenses, income, and deductions throughout the year. By using our platform to organize and categorize financial data, clients can ensure that they have all the necessary documentation and information to complete their tax return accurately and efficiently.

  • Reduce stress and anxiety.

Finally, we provide you with much needed peace of mind and help navigate this complex economy by becoming your business partner or your personal CFO. Our platform allows our clients to connect with experts, ask questions, and receive support and guidance throughout the year and especially during tax season.

Investor Friendly CPA® boasts more than a 90% retention rate with stellar reviews across the nation.