The advantages of extending your deadline

Hi!

Filing an extension for your taxes can offer several advantages, especially if you’re finding yourself pressed for time or in need of additional information to accurately complete your return. Here are some key benefits:

1. More Time to File: The most obvious benefit is that it grants you additional time to file your tax return without incurring late filing penalties. This can be particularly useful if you are waiting on important tax documents, dealing with personal issues, or need more time to organize your financial information.

2. Reduces Late Filing Penalties: If you owe taxes, filing an extension can reduce late filing penalties. While it doesn’t extend the time to pay your taxes (you’re still expected to estimate and pay any owed taxes by the original due date), it does prevent the typically higher penalties associated with late filing.

3. Minimizes Errors: With more time to gather your documents and review your tax return, you’re less likely to make mistakes. Rushing to meet the deadline can lead to errors or missed deductions and credits, potentially costing you more in taxes or triggering IRS notices.

4. More Time for Tax Planning: An extension gives you extra time to make better-informed decisions regarding elections on your tax return, contributing to retirement accounts (in some cases), and implementing tax-saving strategies.

5. Avoids Amended Returns: If you file your return and then receive additional information that would have changed your tax outcome, you might have to file an amended return. By extending the filing deadline, you may avoid the need to file an amended return if you receive new information after the original due date but before the extended deadline.

6. Less Competition for Professional Help: Tax professionals are very busy up to the April deadline. By filing an extension, you might find it easier to schedule a meeting with a tax professional after the peak season, potentially leading to more personalized service.

7. Less Chance of an IRS Audit: The IRS starts selecting returns for audit early in the season, and by late-season, their quota is normally full. Due to the statute of limitations, they begin to focus only on the most egregious returns, so filing on extension can drastically decrease your chances of audit. 

It’s important to remember that an extension simply extends the time to file, not the time to pay. With this being said, if you know you will owe, you should absolutely pay any estimates along with an extension. That is the only case that an extension can cause an issue is missing your estimates. 

Please let us know if you need help computing your estimates or filing your extension. For this or any other accounting & tax assistance, simply hit “contact.”

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George Dimov CPA

www.dimovtax.com

(833) 829-1120 toll free