Being aware of the rules and guidelines imposed by the IRs is one of the many things you need to consider before filing for a personal tax extension. It’s necessary for you to understand what the IRS requires you to do and the results of you, filing for a tax extension. As soon as you get yourself familiarize with the necessary information, requesting for an extension shouldn’t be that difficult anymore.
When is the right time to file for an extension?
Personal Tax Extensions must be filed by April 15th because it's the original due date of the standard 1040 income tax form. You cannot miss the deadline and must request a tax extension right away because doing otherwise will prompt the IRS to treat you as a delinquent taxpayer. The filing doesn’t really take too much time and effort, so you should be able to make it on time once you find out you need to. Filing an extension will only help stretch the time that you need to file your tax return. Paying for any taxes owed will not be included in the additional time given to you so you must send your payment to the IRS by April 15h to prevent them from charging you penalties.
What documents are needed to file for an extension?
You must complete and submit to the IRS, Tax Form 4868 also called the Application for Automatic Extension of Time to File U.S Individual Income Tax Return. As soon as you request a tax extension is sent, your return will be due six months after October 15th which is the original deadline. A personal letter addressed to the IRS can also be done if you feel that you’re going to need more time to file. IRS sometimes approves taxpayer’s request for additional time and grant two more months to file, which means you have to submit your tax return by December 15th of the same tax year.
Filling out the Tax Form 4868 will require personal information such as your SSN, address, and an estimated amount of tax owed. Estimating your tax liability and paying it are done for those who are not filing a complete return. A tax refund, on the other hand, will not require a taxpayer to file for a tax extension and will have no penalty that corresponds with it. However, if you do owe the IRS additional money, you must determine how much it's going to be by filling several portions of the income tax return. Filing for an extension is best for those who live overseas or for those serving the active military.
Why should you file an extension?
In most cases, filing for a tax extension is absolutely necessary. However, some taxpayers file for it even if they don’t really need to. This may show a bad character on the part of the taxpayer, but they are allowed to do it under the tax law. Here are the most common reasons why a taxpayer may need to file a tax extension:
Living Overseas. If you are not in the United States when your tax return is due, you may need to file for a tax extension. Filing for one will give you six months to turn in your tax return and if you’re lucky, the IRS can grant you two more months to do it given that you are able to give a valid reason for requesting the additional months.
Emergency Reasons. We all go through unexpected financial and personal struggles causing us to run out of time in preparing our tax returns. If this happens to you during tax season, don’t hesitate to file for a tax extension. It won’t just give you plenty of time to prepare but will allow you to take care of your current personal issues, whatever that is, as well.
Missing Documents. Did you lose or misplace all your important documents such as receipts, W-2, or 1099s? It happens to the best of us. Instead of panicking trying to find where those documents are, try to file for a tax extension instead. It’s better than having to rush filing your tax return, make mistakes, and end up paying more taxes and penalties.
The most important tip we can give you is to schedule an appointment with a tax professional right away before April 15th. That way, you don’t have to worry about getting everything ready or having to file for a tax extension when you could have avoided doing it all along. However, if circumstances just won’t allow you to file early or meet with a tax professional, filing a tax extension can be the best alternative to avoid the hassle and unnecessary additional costs.
