Tax season is just around the corner, and it’s time to start thinking about getting your documents together to start your annual tax prep with your trusted accountant. Though everyone needs to file and pay taxes, no two situations will be identical. In fact, many individuals with complicated tax scenarios find it difficult to collect all of their documentation in time for the tax deadline. The IRS understands this and is willing to grant qualifying individuals a tax extension so they may avoid any late penalties. However, there’s more to the extension than meets the eye. Here are a few things you need to know about filing a tax extension with the IRS.
What Are Extensions?
Tax extensions give you more time to handle your personal or business-related tax prep. If granted, an extension allows you to file taxes up to six months after the April 15th deadline without facing any late filing penalties. This gives individuals and business owners a chance to locate all of the required documents to properly file their returns and helps reduce the risk of errors due to missing information or improper recording due to a rushed time frame. Your accountant or CPA will recommend whether or not an extension is the best decision for your needs.
Despite the implications, extensions do not give you more time to pay the taxes you owe without penalties. Only a payment plan negotiated with the IRS can accomplish that. By filing an extension, you’re allowed to wait to pay what you owe, but you will be assessed interest on the amount due, late payment fees, and other related fines. The best thing you can do is estimate how much you’ll owe for the year and make a payment before April 15th to reduce the fines and penalties assessed once your return is filed in October.
How Do You Request an Extension?
If a CPA or accountant handles your tax prep, they’ll help you determine if an extension is in your best interests. If it is, you can request an extension online or allow your accounting professional to file the request on your behalf. Should the request be granted, you’ll receive an email confirmation indicating that the IRS approved the extension.
A-Z Business Solutions has helped individuals and small businesses with all of their tax prep needs for years. Whether you’re looking for a second opinion on if an extension is best for your situation or simply want help filing your taxes, their friendly accountants are ready to help. With locations in O’Fallon, St. Charles, and Chesterfield, MO, as well as Tampa, Seffner, and Clearwater, FL, you’re sure to find an office close to your home. Learn more about their services online and call (855) 553-2665 to schedule a consultation with an experienced accountant today.