Tax extensions are a controversial subject, and there’s lots of bad information swirling around the internet. Truthfully, six-month extensions have become commonplace among businesses and individual tax payers, and there are virtually no downsides associated with filing one.
In fact, filing a tax extensions can provide several valuable benefits, and we’re going to cover some of them in this blog post. Keep reading to find out why tax extensions can be an excellent option for many taxpayers.
Are Tax Extensions a Good Idea?
Tax season is always a hectic time of year, and you can avoid a lot of the headaches by filing for a six-month extension.
First and foremost, filing for a six-month extension does not have any negative impact on your tax return whatsoever.
It does not increase your audit risk.
It does not cause your tax bill to go up, as long as you pay your taxes by the deadline.
The truth is, most investors & business owners regularly file extensions, so they have as much time as possible to plan and maximize their tax savings.
The Top-4 Reasons to File an Extension
Extensions aren’t a bad thing. In fact, they actually provide some valuable benefits for taxpayers. Here are four of the most notable:
- More Time for Tax Strategy: There’s no reason to rush into your taxes if you’re not prepared. An extension gives you and your tax advisor more time to refine and perfect tax planning & strategy.
- Easier Access to Your Advisor: The weeks leading up to the April deadline are extremely busy for your tax preparer. Your advisor can spend more time on your return if you file in Fall
- Less Stress for Tax Payers: Business owners are ALWAYS busy. You won’t need to rush to get your taxes in order by April if you take advantage of the extension option.
- Extra Time to Gather Paperwork: If you’re waiting on 1099s, K-1s, or other key tax forms, you should file an extension, so you can get everything you need before you file. Otherwise, you risk reporting inaccurate income totals that could trigger an audit.
Don’t hesitate to file for a tax extension if you need it. They can make filing taxes much less stressful for both you and your tax preparer.
Closing Thoughts on Tax Extensions
Remember, an extension gives you additional time to file, but it DOES NOT extend the deadline for payments.
Make sure you’re paid up by Tuesday, April 18th, to avoid penalties.
If you can’t pay in time, contact the IRS to request a payment plan as soon as possible.
If you’re interested in filing a tax extension, we can help! Get started with our firm now to lock in your spot for this tax season.
Our roster is filling up fast, so don’t wait! Connect with our team today to get the ball rolling on your tax return.
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