Two Things You Need to Know About Tax Extensions

Did you know that a tax extension can give you up to six more months to submit your tax returns? You do not have to file for an extension when you are ready. But if you are convinced that you need a couple more months to get the job done, you can always apply for an extension. But before you request a tax submission extension, you need to know a couple of things about this undertaking.

The Procedure is Easy

This is probably one of the best things you might hear about tax extensions. You can always have your application granted if you are convinced that you do not have the relevant documents available to you at the time. If you had to file for an extension somewhere around April, you can get an additional six months and make your submission before mid-October.

Tax extension applicants only need to fill in a tax extension form, which can be done either online or manually. It is also worth noting that there are no special requirements to meet when filing for an extension. Any taxpayer who needs an extension will have their request granted.

File if You Can’t pay

There is always a possibility of not having money to pay for taxes. A good number of people, especially those in business are always at risk of finding themselves in such situations. If by any chance you are not able to pay to taxes, at least at the moment, file for an extension.

One main reason to file for an extension is the nature of fines imposed by the IRS on tax defaulters. The penalty for not paying your taxes is ten times more severe than registering for an extension. For instance, filing a tax extension means that your taxes will accrue interest of 0.5% on the unpaid balance. On the other hand, not filing for an extension attracts 5% penalty on due balance every month. These two instances show that an extension can save you a significant amount of money.

Finally, it is also worth noting that IRS can waiver some of these penalties when you show a “reasonable cause” for to paying your taxes. But this not always guaranteed. Thus, if you find yourself unable to pay your taxes filing for an extension gives you more time to look for money to pay your taxes and a soft landing.