Afraid You Might Miss the Tax Deadline? Three Reasons to Request an Extension
Three reasons to file a tax extension
The tax deadline is three weeks away from today (Tuesday, April 17, 2018). If you’re still frantically organizing your documents or still considering hiring a CPA or tax advisor to help, you may want to consider filing an extension.
The IRS typically grants an extension up to six months for taxpayers who need extra time to prepare their returns. You can request an extension for any reason; you just need to complete the proper extension request form ahead of the deadline.
While the IRS would prefer you to meet the original deadline, sometimes you just need more time. With the extension, you’re able to more thoroughly review all your documents with a little mental ease. Not to mention, you don’t want to miss out on any tax cuts or other benefits you may be eligible for that you might have overlooked while rushing at the last minute.
Those who don’t file at all or request an extension after the deadline has passed are subject to up to 25% of penalty fees. But keep in mind: the extension only applies to when you must file. If you anticipate owing money for the 2017 tax year, the full balance is still due on April 17, 2018 and you’re still subject to any late fees, penalties and accrued interest on the amount of taxes due until the balance is paid off.
If you find yourself in one of the below circumstances, you may want to consider filing for an extension within the next three weeks.
1.) You’re waiting on a K-1 or 1099 form.
K-1 forms are issued to estate trustees or partners who own a stake in a firm, and 1099s are typically issued for freelance or contract-based income (which you still owe taxes on). While these are required documents, they are oftentimes sent after the tax filing deadline. Make sure you wait to receive these forms before filing to report the most accurate information.
2.) You’ll be on vacation during the tax deadline.
If you plan to be on vacation and won’t have access to certain physical documents like receipts or invoices to file your return, request an extension. This can be especially helpful if you’re anticipating a refund.
3.) You experienced unexpected events or simply aren’t ready.
That’s understandable – sometimes life just takes over. If you’re dealing with a major life event, request an extension to be on the safe side.
The Bottom Line:
The IRS is flexible when it comes to requesting filing extensions. Just keep in mind that if you anticipate owing money, you still need to pay the balance by April 17,2018 or you’ll be subject to interest and penalties on top of what you owe.
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