The saying that something is better late than never applies perfectly to filing your taxes with the IRS. If for some reason you cannot file your return on time, the IRS should allow you to file an extension of time, typically up to 6 months after the traditional April 15th tax-filing deadline. But, as with most things, there are pros and cons to filing an extension.
Advantages of Filing a Tax Extension
The obvious advantage to filing a tax extension is that it buys you more time to get your financial records in order so that you can properly prepare and file your return. Filing a return with inaccurate information could result in a higher tax bill for you or, worse, an audit from the IRS. By having more time to ensure all lines on your return are completed appropriately, you can rest easy knowing that your return is 100% correct when it lands on the desk of an IRS agent instead of submitting a return that you had limited time to complete.
For individuals or small business owners who have a more seasonal work schedule with summers off or lighter customer loads at specific times throughout the year, filing an extension may be perfect so that you have more time after April to work on properly preparing and filing your return. In addition, it’s easier to work with an accounting firm after tax season since they won’t be as bombarded with IRS filings for clients. This could help you get the most accurately prepared return, which is what we all want, right?
Disadvantages of Filing a Tax Extension
It’s nice to get your tax filings out of the way in April so that you can focus on other priorities, such as running a small business or spending time on vacation with loved ones. Obtaining an extension basically means your filings must linger on your to-do list for a few more months, and you’d have to work on getting this task done during the summer or early fall rather than crossing it off your list as soon as you can.
You’ll also have to be more patient on getting your tax refund. If you file by the regular deadline in April, you’ll get any money back from Uncle Sam within a short amount of time. But if you file an extension, you won’t get your refund check until you’ve filed. This could be in June or July, or as late as October or November depending on when your return is filed and processed.
Finally, remember that a tax extension simply means that you are extending the deadline by which your tax return is due to the IRS. It does not give you more time to pay your taxes. If you fail to make tax payments by April 15th or by another deadline you received via an extension, you could face late-payment penalties on top of any money you already owe.
For assistance with filing a tax extension, turn to the accounting professionals at 1-800Accountant. Call 1-800-222-6868 or check out the “Services” page on www.1-800Accountant.