Due to the widespread disruption caused by COVID-19, the IRS has extended this year’s tax filing deadline until July 15th. While having a few extra months to file a tax return is helpful, some people may not be ready come July. The IRS will allow you to file for an extension, but it’s important to know the pros and cons before making a decision.

The Benefits Of Filing For a Tax Extension

If you haven’t received all of your tax documents, need time to find an invoice, or have a family emergency, filing for an extension can buy you valuable time. Instead of feeling rushed to finish, an extension ensures you have the time for accuracy, preventing frustrating and potentially expensive mistakes. 

Following tax season, tax preparation professionals will have more availability to help with any issues, and may even offer reduced rates. As an added bonus, filing later in the year reduces your risk of an audit. The IRS must conduct a certain number of audits a year, but by October, they’ve likely hit that requirement.

The Drawbacks Of Waiting to File Your Tax Returns

While filing for an extension does push your deadline for filing a tax return, the April deadline for paying your taxes remains the same. Any associated late fees might be lowered after being granted an extension, but failing to pay on time could increase your tax bill by hundreds of dollars.

You won’t need to file a return if your income for the year doesn’t exceed the standard deduction. The IRS may think you’re planning to submit a return if you filed for an extension. Even though you may end up not needing to submit one, this confusion could cause them to accidentally charge you a late fee.

Filing your tax returns can be confusing and overwhelming. Individuals and businesses throughout Arkansas’s Twin Lakes Area trust The Callen Accounting Group, PLLC. With many years of experience and a commitment to providing the best service possible, rely on their team to take the pressure out of preparing your taxes. Visit their website for more on their list of services, or call (870) 425-6066 to make an appointment. Follow them on Facebook for tax tips and advice.