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It is that time of the year where you are collecting all required financial information. If while doing so, you realize that you need more time, you can file for a tax extension with the IRS (Internal revenue Service). This can be done before the tax day; which is the 15th of April for any given year. The process of tax extension is not a very tedious process as it seems to be. Here are five good reasons why you should file for a tax extension.
1. Gives you additional time: Filing for a tax extension allows you with an additional time of six months to gather all your required information. This way, you can use this time to neatly and orderly arrange all data. You can then file your taxes as leisure and avoid any errors that can occur during the process of actual tax filing.
• If you are waiting for any of your lost documents from the government, then also you can file for a tax extension.
• There are cases when you or your family is facing natural calamities or family emergencies. This needs your time. Then you can file a tax extension and get an additional bonus time to file your taxes.
• This is also applicable if you are not available during the tax season. If your vacation falls during the tax season, you can plan in advance and file a tax extension.
2. Can file for business taxes as well: This is not just applicable for your personal taxes; you can file for a tax extension for your business taxes as well. You can do so, even if your business is located outside the United States. Also, if you have just started your business, and you need more time to organize your cash flows and your resources you can do so, by filing a business tax extension. For business tax extension, you should mention the type of your business and your partners involved. This will allow you to get a business tax extension (http://biztaxlaw.about.com/od/businesstaxseason/qt/File-Business-Tax-Extension-Online.htm) for a period of five or six months depending on the type of your business.
3. It is a simple process: The process of applying for a tax extension is very easy and not a time consuming process. Filing for a tax extension is just a form away. You need to download the required form, fill it and submit it with the IRS. You just need to provide your name, address, Social security number and employment details at the time of filling the form. This is an automatic process, meaning that you can get a tax extension automatically without you spending time for any approval process. You need to fill form 7004 for your business tax extension and form 4868 for your personal tax extension.
4. You do not incur any penalties: The government has the policy to allow its users to apply for a tax extension. So, this process does not put your name in the list of tax defaulters. The government does not penalize you for filing a tax extension. It is a free process. Meaning, anybody can file for a tax extension without incurring any kind of legal penalties for the same.
5. Things to remember: All you need to remember to fill in the tax extension form is that you need to provide your details correctly in the form. If the details that you have provided in the form are incorrect or it does not match with the information that is present with the IRS, the IRS can reject your plea. Also, you need to remember to pay all your previous dues before you apply for a tax extension for the current fiscal year.
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