These days, many American are struggling financially as our economy remains stagnant and unemployment grows. While you may think that rushing to file your tax return is the best way to get a faster tax refund, it’s also a good way to make mistakes. Consider this: a tax extension gives you more time to file, which means you have time to gather all the appropriate documents and even take advantage of new tax laws.
Here are some reasons why getting a tax extension can be very beneficial, especially in a slow economy:
You Have More Time to Prepare Your Tax Return
You know the old saying, “Time is money.” A tax extension gives you that extra time to make sure you’ve claimed every tax deduction and credit you’re eligible for, which can help lower your tax liability or increase your tax refund. You can focus on preparing the most beneficial tax return possible so you don’t end up paying the IRS a penny more than necessary.
You Can Avoid IRS Late Fees
Getting a tax extension means you can avoid incurring the IRS penalty for failing to file your tax return on time. But remember that you’re still expected to pay your tax balance by the original deadline. If you have to use the money for something else instead and you don’t pay your taxes on time, the IRS will likely charge interest and payment penalties on your unpaid balance. However, those fees will be lower if you’ve filed a tax extension. Additionally, you may discover that the IRS fees are less than the interest on your other debt(s). In that case, you can decide whether it’s better for you to pay the IRS or pay down other obligations first.
Patience Is a Virtue That Pays Off
Whether we like it or not, legislators are constantly making new laws and adjusting the existing rules. A tax extension gives you extra time to file, and during that period you may have the chance to take advantage of a new tax law that just went into effect. It could be in the form of a reduced interest rate or a lower income threshold for claiming a tax credit. Have patience and take the time to prepare your tax return in a way that benefits you the most.
Give Everyone a Break This Season
There is no harm in filing a tax extension, and you don’t need to give a reason for requesting one. With a tax extension, you can skip the chaos of tax season and give yourself a break. You’ll also notice that tax professionals are very busy in March and April — many confess to working 18-hour days with little sleep. So rather than having your appointment squeezed into their schedule, you can visit them in July or August instead. This will allow your tax preparer to focus on you. Even the IRS likes tax extensions because it decreases the number of returns that have to be processed in the spring.
A Change in the Wind Can Lead to a More Complex Tax Return
A lot of Americans are dealing with the consequences of losing their jobs or homes due to a bad economy and lack of solid financial advice. If you’ve had to move, sell some assets, or make a withdrawal from your retirement account, those things will complicate your tax return. A tax extension allows you to have more time to make sure you submit an accurate tax return. Consider using an Authorized IRS e-file Provider like TaxExtension.com to apply for an extension online. It only takes a few minutes to e-file your request and you get 6 extra months (5 months for certain businesses) to prepare your tax return.
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