Tax day is April 15th, which means you’re running out of time to file your taxes before the deadline. Taking a few hours over the next couple of days to get this done might save you money in the long run. Keep in mind, though, that most tax preparation services hike their rates in the weeks and days leading up to this deadline, so be prepared to pay more to file during this time.
But what happens if you don’t have all your documents, or you aren’t quite ready to file? You can request a filing extension to give yourself more time.
We’ve put together an overview of what it means to request a filing extension so you can decide if it’s the right move for you. Keep reading to find out more!
The Pros and Cons of Tax Extensions
IRS Form 4868 will allow you more time to file your taxes. This form is technically just a request, but most of the time it will be honored. You don’t have to provide a reason for needing extra time.
Here are some reasons an extension is a good idea:
- You are granted 6 months to file.
- Late penalties can be reduced, especially if you can’t pay your full tax amount by the April 15th deadline.
- You’ll still get a refund.
- Filing after the deadline can reduce preparation fees, as rates go down after April 15th.
However, it’s not all good news. Here are some of the downsides to filing a tax extension:
- You must still pay your taxes owed by April 15th, though late fees are reduced.
- You have no extra time for making certain elections, funding retirement plans, or for switching from a joint return to a separate return.
- The IRS might assume that you have to file a return, even if that ends up not being the case.
If you do choose to file an extension, the process is simple and can be undertaken digitally from the IRS website.
For questions, concerns, and help with filing a tax extension, don’t hesitate to call Taxation Solutions, Inc. We’re here to provide reliable tax assistance in Austin.