Every year, millions of people request tax extensions from the IRS. Some of them apply for an extension even though they don’t actually need one. Although it’s always recommended that you file your taxes on time, there are several benefits of getting a tax extension.
Here are some of the biggest advantages of obtaining a tax extension:
1. It gives you more time to get organized.
Despite the fact that most people are aware of the April 15th filing deadline, many taxpayers simply wait until the last minute to gather and organize the appropriate documents/information. Rather than rushing to file your return, a tax extension can give you six additional months to prepare your taxes, which should be more than enough time to get everything together.
2. There are no eligibility requirements.
The IRS does not ask taxpayers why they are requesting tax extensions – they will grant you six months automatically. If you just need more time to file, no matter your reason, a tax extension is the best way to get it.
3. A tax extension can help you avoid late penalties.
Remember this: an extension only gives you more time to file, not more time to pay. If you owe taxes, you must still send payment to the IRS by April 15th (the original due date for the 1040 tax return). Keep this in mind when you are filing for a tax extension using IRS Tax Form 4868 (Application for Automatic Extension of Time to File U.S. Individual Income Tax Return), because you must report any balance due in Part II of that form. Your payment should be submitted with your 4868 Form ― you will owe interest on any amount that not paid by the due date of your return (April 15).
4. Avoid the chaos of tax season.
As you probably know from past experience, tax season can be hectic for everybody. With a tax extension, you can let April 15th come and go without worry. And when things die down, you can begin to work on your tax return. Additionally, it is often much easier to make an appointment with your tax professional after the height of tax season is over.
Now that you are aware of the benefits of a tax extension, it is easier to understand why so many people rely on this option. Although you probably shouldn’t request an extension unless you need one, it is a relatively simple process. Once you send the proper form to the IRS, as well as any payment that is due, you will be granted six additional months to file. Just remember that the later you file your tax return, the later you will receive your tax refund.