The 2020 filing deadline for federal taxes has been moved to July 15th, and the state of Georgia has followed suit. Even with extra time, though, you may need to file an extension with all the current uncertainty in the world. An income tax extension grants an additional six months to file your taxes. You can apply for an extension by filling out the IRS form 4868 and mailing it or submitting it electronically. While an extension allows more time to file, it doesn’t provide more time to pay the taxes you owe. Keep the following in mind and work with an accountant to decide if an extension is the right choice.

Should You File an Income Tax Extension?

1. Disorganized Tax Documents

Filing taxes means both you and an accountant will need to gather the proper paperwork. If you’re still awaiting important documents, such as a W-2 or 1099, or simply lost them in the shuffle, filing for an extension will ensure you file accurately and don’t get audited down the line. According to one expert accountant, one of the main reasons people get audited is when their return doesn’t match their W-2 or other forms sent to the IRS. Save yourself potential trouble by taking an adequate amount of time.

2. Unforeseeable Events & Living Abroad

Whether you’re caught in a natural disaster or you or a loved one is unwell, there are certain life events that make your taxes low priority. File for an extension and take the time you need to care for yourself and your loved ones.

Additionally, if you’re living abroad or having difficult returning to the U.S. due to the pandemic, consider an extension to determine which documents you need and to deal with the additional challenges of communicating with an accountant from a distance.

If it’s your first year filing from abroad, file for a special extension via form 2350. You might also want an extension to qualify for the foreign earned income exclusion.

3. Self-Employed Status

If you’re a business owner, taxes will come with more paperwork than the average person’s. In some cases, paperwork might not arrive in time for the filing date; for example, if you own an S corporation, necessary paperwork, such as the Schedule K-1, may not arrive until after the deadline.

Although it’s tempting to file on time and then file an amended return once all the necessary information is accounted for, you’ll probably end up making more work for an accountant and thus cost yourself more money.

Make tax season stress-free with JJR & Associates LLC in Atlanta, GA. They offer exceptional consulting and accounting services to advance business or personal goals. Their accountants provide trustworthy bookkeeping, tax planning, payroll, financial analysis, and a range of other creative solutions for your household or to ensure your business is lucrative now and into the future. Schedule a free consultation by calling (404) 437-7748. Visit the firm online for answers to common accounting questions.