Written By: MB Group
Whether you're a business owner or an individual, it's completely normal to request more time to file your federal income tax return. In fact, over 10 million taxpayers request tax extensions each year. Let's take a closer look at tax extensions, what's involved in the filing process, as well as a couple of FAQs. And if you would like more personalized or tailored guidance based on your unique situation, don't hesitate to reach out to the team at the MB Group today.
Since 1955, the “Tax Day” in the US has been April 15th. But if you feel you'll be unable to file your taxes by this day, you have the option to file an extension, which will provide you an additional six months to file your taxes. Tax extensions effectively move your tax filing date from April 15th to October 15th. You do not need a specific reason to file an extension, and the IRS automatically grants them as long as you complete the necessary paperwork on time.
When you file for an income tax filing extension, you don't necessarily have to specify why. Even so, some of the most common reasons include:
Many people feel that requesting a tax extension is inherently a bad thing, but there are actually a handful of benefits.
By filing a tax extension, you'll not only have more time, but you can alleviate some stress associated with tax time. More time also means you can meticulously review your tax return and make sure you're maximizing all the benefits available to you.
Another reason to file a tax extension is to avoid costly penalties, such as the 25% failure-to-file fee. However, if you do file an extension and fail to file by the extended deadline, you will be expected to pay this penalty. It's important to understand that when you file an extension, you're only getting extra time to file. This does not mean you have more time to pay, and your payment will still be due at the deadline.
When you file a tax extension, you may be able to utilize retroactive changes to the tax law implemented after the deadline. This strategy would allow you to do so without the expense or added time associated with filing an amendment.
Contrary to popular belief, most tax specialists and experts theorize that filing a tax extension actually decreases your likelihood of being audited. This sentiment is based on the fact that IRS auditors are required to meet audit quotas every year. And when you file an extension, your tax return may fall outside the quota window.
No, there are no penalties associated with filing an extension. If you owe taxes, however, it's imperative you make the required payment on the due date. As we previously mentioned, the extension applies to your tax filing deadline—not the due date of your tax payment. Failure to make a payment on time can result in additional penalties.
Filing an extension for your filing deadline is easy and can be executed in different ways based on your unique situation. In general, you can:
When it comes to ensuring your taxes are optimized, you're not alone. In fact, you have an entire team of support at the MB Group. As an experienced team of CPAs and accountants, we specialize in helping businesses and high net worth individuals minimize tax liability and maximize return. And if you need more time to file, we make the process as easy as possible.
Contact the MB Group today to learn more about how we can help you get the most from your tax return.
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Tags: Taxes
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