For all of us, tax day has always fallen on April 15 for most years. However, due to the adverse effects of the global health crisis, a lot of things have been upended. The dreaded coronavirus disease threw a monkey wrench on our programs and messed up our affairs.
Out of fear for public safety, the IRS decided to move the tax filing deadline from April 15 to July 15 this year since we’re living in non-normal conditions. Now that July 15 is just around the corner, some people are speculating that another extension might be declared, although the IRS has already denied this and said that it is not something they’re considering.
The decision to extend this year’s tax filing date is more for public safety. However, one of its benefits is it gave you more time to gather the correct data for filing. Now if you still haven’t accomplished what you need for filing taxes, you don’t need to rush it to make the July 15 cut-off.
You can go on an automatic extension up to October. It is automatic upon request and is easy to do. However, before you go down that route, ask yourself if you truly need to do this and what the repercussions are.
What’s in store for those who extend up to October?
While there are certain considerations why you should or should not file for an October filing extension, you need to take note that it is only good for filing. The actual payment for the taxes that you will owe will still need to be made by July 15.
Now that we’ve pointed that out, there are a few good reasons why an extension could work for you.
The main benefit of an extension is it gives you more time to reflect and thus, file more accurately. An inaccurate filing can lead to an audit that most folks aren’t excited about. The extension can give you enough time to gather the correct data needed, consider other reporting alternatives, and seek out the help of professionals such as property tax reduction consultants.
Doing so will help lessen the chances of amending. While it isn’t exactly a bad thing, amended returns have a greater risk of being scrutinized. So make sure you correctly file your taxes to eliminate the need to amend later on.
Going on an extension also gives you enough time to retrieve the correct K-1 and 1099 forms. What happens sometimes is you have all the documents you need to file then you proceed with the filing only to have a corrected Form K-1 or 1099 arrive at your doorstep a few days later. The earlier the return, the greater the risk of getting a corrected form later on. An extension will leave little room for surprise visits from tardy corrected forms.
Time is on your side with an extension. This is not to say to dilly-dally with filing but an extension affords you extra time to reflect and carefully process everything for correct filing. If you need some extra time to prepare, then request an extension. The IRS doesn’t even have to approve it as it is automatically approved. However, if you’re already confident that you have all of your papers and documents and data in order, then go ahead and do your duty as a citizen.
At the end of the day, it is your call. Just make sure that you have all of your bases covered. If you need guidance and counsel about filing your taxes, reach out to qualified industry professionals. They would be more than willing to lend a helping hand.