Last week, we covered 3 reasons why it’s better to file on time before April 15, rather than request an extension from the IRS.
This week, we’ll cover three situations where requesting an extension is a good idea.
Situation #1: Your tax situation got more complicated than you thought
Life changes and so can your tax situation. Perhaps you got married last year or had a divorce. Or maybe you declared bankruptcy, foreclosed on a home, and so on.
Major life events like these could change how you file taxes, making it a good idea to file for an extension so that you have extra time to understand your tax situation.
If an extension on your return means the different between a correct and incorrect tax return, then request an extension.
Situation #2: Some of your tax documents are missing
In a perfect world, all of your tax documents would march straight into your designated tax return folder, making it easy to stay organized when doing your taxes.
Unfortunately, sometimes your tax documents can get lost or have a mistake. In cases where you need extra time to get your tax documents straightened out, requesting an extension can help.
Situation #3: Something else becomes more pressing than filing by April 15
Sometimes we try our best to file on time, but life can throw you a curve ball and suddenly you have to attend to a personal emergency.
In cases where your personal life has become overwhelming, requesting another six months to file can give you the flexibility to take care of things one step at a time.
However, if you decide to file for an extension, read on below to make sure you understand what you’re requesting from the IRS.
What everyone should know about filing after April 15
Although getting an extension is easy and usually automatic, make sure you understand that your duty to pay any owed taxes is not extended.
The purpose of getting an extension is to get extra time so you can submit a complete and accurate tax return to the IRS.
Essentially, if you do not pay the taxes you owe by April 15, 2013, you will owe an interest penalty for any unpaid federal and state taxes. You may also be charged a late payment.
To avoid these charges and penalties, you should make an estimated payment of taxes owed to the IRS and to the Minnesota Department of Revenue.
So there you have it, three reasons to file now and three situations where getting an extension is a good idea. If you need to file for an extension, use Form 4868 or ask your tax preparer to file it for you.
If you have any tax related questions, send them our way via the contact form.