There are benefits to filing for a tax extension, and there is no cost or penalty for doing so. An extension allows you to have up to six additional months to finish your tax return filing. But those aren’t the only benefits!
Filing a Tax Extension Benefits
Are you a business partnership with complicated tax returns? Filing for an extension helps you avoid filing an amended tax return later for unexpected changes. Once you file for an extension, you can send in a “superseded” tax return, so investors don’t have to file their own amended tax returns if changes come up after the partnership’s original filing.
If you are an individual, filing a tax return won’t give you more time to pay any taxes due, so you’ll want to estimate your tax liability and send in payment along with your extension. That way you won’t have to worry about accumulating penalties and interest. It’s easy to go to the IRS and State online secured ACH systems to make your payment.
Since April is the busiest time of year for CPAs, it’s hard to get an appointment during this time crunch. Filing an extension can give your tax accountant more time to focus more on your taxes and find all potential tax deductions for you. Additionally, April is when the IRS usually fills its audit quota, so filing later in the year could lower your chances of having your return audited.
Filing for an extension gives you six extra months to get your documentation together and check with a tax professional. It also gives you more time to make decisions like depreciating equipment, taking a Section 179 deduction, or whether you should decide to carry back or forward your business losses. With the extra time an extension provides, you can improve the accuracy of your return instead of filing in a rush and making mistakes.
What NOT To Do When Filing a Tax Extension
Filing without using an electronic filing system means more chances of making mistakes. For example, if you accidentally insert the incorrect social security number by just one number, it can stall your filing or reject it, so you’ll want to double and triple check your SSN on the form.
The IRS likes when you file electronically because your return will be more accurate. It’s easy for mathematical errors to happen. It can, unfortunately, cause you unwanted financial and legal stress. Still, while a tax preparation software program is great for checks and balances to avoid errors and miscalculations, using an accountant or CPA can eliminate this worry altogether.
You also don’t want to overlook the future of your family’s finances. Checking with one of our tax advisors and accountants can help protect your estate with a will that helps guard their financial future. Read more about our estate planning services:
You will also want to check that your Individual Tax Identification Number (ITIN) hasn’t expired, so make sure it is up-to-date. This number helps prevent fraud and protects applied refunds, credits, and exemptions. Make sure you are using the correct filing status, which you can double-check by using an IRS Interactive Tax Assistant or a good accountant.
For future filings, a good idea is to not wait until the last minute to get your taxes done. So when October rolls around this year and you file your taxes, be sure to get the work done! And if filing your taxes isn’t your strong suit, our Corporate Capital, Inc. team in Las Vegas, Nevada, is always ready to help!
Corporate Capital Can Help
Our business management team has the experience you need to take care of your taxes expertly. We have been helping people just like you get the most out of their taxes federal and state tax returns. We make sure they comply with taxpayer reporting responsibilities. You can read more about our tax strategies or call 855-371-0070 to learn more!