Benefits of a Tax Extension
If you have not filed your tax return by the deadline, you have many options to get more time to get your paperwork in order. However, you should not rush to get your tax return done. Instead, prepare your return before the deadline and file it by Tax Day. There are no benefits to taking a tax extension unless you cannot afford to pay your taxes on time. But if you absolutely cannot, you should at least try to file your return by the deadline.
When filing a paper request, make sure that you double-check the data that you have entered. Incorrect information may lead to a rejection. Certain individuals, like military personnel serving overseas, are automatically eligible to receive an extension. However, filing for an extension does have its downsides. Not only can you face additional time in waiting for your documents, but it can also take up extra time organizing your deductions. However, the benefits outweigh the risks.
While a tax extension gives you more time to complete your return, many experts advise against filing for an extension unless you are missing critical information. For example, if you’ve been sick and haven’t received your paycheck in time, filing an extension may give you more time to gather all the information you need. You can also get a refund if you overestimate your tax payment. The choice depends on your needs and your organization’s requirements.
Besides giving you extra time, filing for a tax extension also allows you to open a SEP-IRA before the April deadline. In fact, filing for an extension will also allow self-employed taxpayers to open their SEP-IRAs by the extended deadline. By requesting a tax extension, you will be giving yourself extra time to think about your decisions. Having more time will also help you avoid the inevitable mistakes that can be made when preparing a tax return under pressure.
Another benefit of getting a tax extension is that it’s not limited to the IRS. If you are in the military, you can get an extension of 180 days. In case you are serving overseas, you can even get an automatic six-month extension. The last date must be at least 180 days after your last day of qualifying service. This is also valid for those who are in the United States for military operations, the Red Cross, and other civilians supporting the military.
There are many other reasons why you should request a tax extension. If you are unable to file your return on Tax Day, you must have an estimate of the amount of taxes you owe so you can file an extension. Other reasons for getting a tax extension include being sick, having trouble finding your records, or having trouble with your computer. No matter what your reason is, getting an extension will help you avoid penalties and interest. You can also get it free of charge if you need it.
A tax extension can also be useful when you’ve missed a deadline due to major life events. For example, if you have recently moved or lost a loved one, you might have missed your deadline. Filing an extension is a good option for this situation because it gives you extra time to deal with your situation. If you have already filed your return, you can file a tax extension automatically by using a program like TurboTax or H&R Block.