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What Is Tax Extension Time Period?

What Is Tax Extension Time Period?

The original filing deadline is April 15th of every year. However, the IRS also gives the taxpayers the grace to extend their filling to the next six months [October 15th], but people who are interested in such extension must first show their interest by filling the Form 4868 (Application for Automatic Extension of Time to File U.S. Individual Income Tax Return) which the IRS will later assess and approve, depending on the validity and authenticity of the information supplied therein. Once the IRS has approved the request, the taxpayer involved will then be given an additional period of six months to prepare their taxes, allowing for more accuracy.

Who Can Get a Tax Extension?

Virtually every taxpayer qualifies for an income tax extension. The good news is that the IRS will not query the reasons behind your request for an extension. In rare cases where there are rejected extensions, most of them are closely linked with supplying incorrect information, e.g., name or Social Security Number that is not recorded with the IRS.

The Form 4868 (Application for Automatic Extension of Time to File U.S. Individual Income Tax Return) is readily available for any taxpayer who intends filling it. However, make sure you supply the right, up-to-date information while filling your tax extension form to avoid unnecessary delay in getting your approval.

The Benefits Of a Tax Extension

There are several obtaining a tax extension, some of which include:

1. It gives you more time to get organized. There are numerous reasons you may not be able to meet up with the regular filing deadline [April 15th], so rather than filing your return under pressure, which could result in colossal errors, you can obtain a tax extension, which will give you an additional period of six months to prepare your taxes. This extension can improve the accuracy of your returns to a significant extent.

2. There are no eligibility requirements. The IRS is renowned for asking the taxpayers lots of questions in different situations, but this is not so when applying for a tax extension. You will not be queried about the reasons you are choosing to request tax extensions, all you need do is to fill The Form 4868 (Application for Automatic Extension of Time to File U.S. Individual Income Tax Return) with your correct details, and you will get approval under a few days. 

3. It Helps Reduce Late Penalties. The IRS imposes two types of penalties, which include – a 5% monthly late filing penalty on any tax due as of 2018, and a late payment penalty of a half percent a month. Let’s now say you file an extension and then fill your return on/before the new deadline [Oct. 15th], you’ll be able to avoid the 5% monthly late filing penalty.

4. You Have Extra Time to Make Various Elections on Your Tax Return. There are lots of decisions you need to make when preparing your tax returns and some may even require the consultation or services of an expert to ascertain whether you are entitled to take certain deductions and credits or not. By filing an extension, you will have more than enough time to handle these issues manually or seek help from a professional.

5. Extensions Can Help Reduce Your Tax Preparation Fees. Some accountants are fond of raising their fees once they notice the due date [April 15th] is drawing nearer only to reduce it again when the sensation is getting lower. Nevertheless, if you are looking for a way to save more money, you may decide to shift your tax preparation to a time when these professionals are not highly patronized as their fees tend to reduce during such period. 

Having known the benefits of a tax extension, you should understand why numerous people opt for it. Albeit, you shouldn’t rely on continuation always, unless there is a particular need for it, and the good news is that you can easily apply by just filling the Form 4868 (Application for Automatic Extension of Time to File U.S. Individual Income Tax Return) with your correct details, and it will be approved under a few days.

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