Is your tax return due and you’re not prepared?
This is a common problem. One of the best things you can do is to file for tax extension.
A tax extension is a great way to get the time you need to prepare and gather your documents. However, if this is the first time you are thinking about doing this you may have some doubts about whether this is the right choice for you.
Here is a look at the benefits of a tax extension so that you can decide if it is the way to go.
Approval Is Automatic and Free
You may be hesitant to file for an extension because you think that you will have to pay. This is not the case. Filing for a tax extension is free and will not cost you anything.
You may also be concerned that the process will be a lengthy one. This is also not the case. In most cases approval for an extension is automatic.
The only thing that may trigger a rejection is incomplete or wrong information on the extension form. This is why when applying for an extension you should make sure that you fill out the form correctly. Always double check it.
If you are in the military and serving overseas, you will not have to fill out any forms your application will be automatically approved.
Reduce Your Late Penalties When You File for Tax Extension
There are some stiff penalties for filing your taxes late.
You will completely avoid the 5 percent monthly late payment fee if you file before the extension deadline. After that, the fee will apply.
This is why you should not procrastinate when you get an extension. Start working diligently on your taxes so that you can be ready before your extension is finished.
Improve Accuracy and Seek Help
Filing for an extension can give you the time you need to ensure that you get proper tax preparation. Often there are deductions and credits that you qualify for and when you take the time to do due diligence you get to reap the rewards.
Doing taxes in a rush can cause you to make errors that you would otherwise have caught. Reduce the likelihood of this happening by filing an extension.
Reduce the Chances of An Audit
The chances of an audit are less likely when you have an extension. Every year the IRS must do a specific number of audits.
If you have been granted an extension up to October there is a higher likelihood that you will fall under their radar for that year.
A Final Look at Tax Extension
If you are considering whether you should file for tax extension you now have a more clear picture of the benefits. Do a careful review of your documents to see if you really need an extension.
Since it is free and easy to obtain, it is better to choose this option instead of filing in a rush and making mistakes.
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