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Tax Extensions – Why you need one (or more than one)

April 15 is known as “Tax Day”. In fact, the real Tax Day wrapping up tax season is October 15. The  IRS allows a generous “automated” 6 months extension to every taxpayer – but it is not automatic. The extension must be requested by filing Form 4868 (TFX can file this for you).

Some taxpayers are reluctant to file an extension. Commonly cited reasons are:

– An extension may raise a red flag before the IRS and increase the risk of audit
– I am a natural procrastinator. If I file an extension I may be late in October too.
– I have all my tax documents ready. It is just the matter of getting the forms filled. Why file an extension if I won’t use it?

In truth, none of those reasons matter. You can file your tax return at any time up until the extension date. Giving up this free gift from the IRS is akin to rafting without a life vest; you don’t expect the raft to turn over but if this happens that little vest will be your life saver. And, importantly, you don’t get extra points for finishing your trip without wearing one.

Whole Story at TFX.

From → TFX Articles