Before filing for an IRS tax extension, it is important to make sure it’s right for you. There are many reasons you may need a tax extension such as needing time to track down missing tax documents, you’re experiencing an unexpected life event, or if life itself has just been too busy!
If you find that you are unable to complete your 2021 federal tax return by the tax deadline, you will need to file an extension with the IRS to avoid any potential late-filing or late payment penalties. Filing for an extension will allow you to push your deadline to October 15, 2022. It is important to understand that this extension only pushes back the due date for filing your tax documents. This does not give you extra time to pay taxes that you may owe. If you believe you owe money this year, you will need to estimate the amount after filing for an extension. You will still have to make a payment by the deadline.
E-file for a faster refund
If you estimate a refund after you file, the quickest way to get your money is to e-file your return using trusted tax software. Completing your return by hand and using snail mail can make this process longer for your documents to get into the hands of the IRS for processing.
Receiving your refund via direct deposit is another way to speed up this process. When using tax software, you can add your bank account information at the end to have your return deposited directly into your bank account.
When choosing an online option to file your taxes, consider these features:
Prioritized security works to protect your personal information by implementing effective safeguards, procedures, and practices for security. This includes processes like identity authentication, monitoring, data encryption, and payment compliance to keep your debit/credit card information secure. It is important to research software to ensure it will keep your private information private.
Value pricing will ensure you’re not paying more than necessary to file. Premium service should not come at a premium price.
Use IRS Free File
Almost anyone can e-file their tax return for free through IRS Free File. The program is available from January 2022 through October 15, 2022. E-filing is a safe and accurate way for people to file their taxes. Filing electronically can also help taxpayers determine their earned income tax credit, child and dependent care credit, and recovery rebate credit. If someone is eligible for a recovery rebate credit – and either didn’t receive Economic Impact Payments or received less than the full amounts – they must file a 2020 tax return to claim the credit even if they don’t usually file.
Take advantage of IRS repayment plans
Those who find themselves with a tax bill after completing their tax returns can take advantage of the IRS payment plans, if applicable. The IRS offers both short-term and long-term plans so you are able to choose an option that works best for your situation. Pay as much as you can initially and then enroll in a plan so you avoid late-payment fees.
File sooner rather than later to avoid penalties
The extra time you get with an extension can certainly ease the common stressors associated with completing your tax return, but it could also create a procrastination habit. Before you know it the October 15 deadline will approach, and you could be left scrambling again. Avoid that last-minute rush, as well as late filing penalties, by finding time to file before October comes around. This way you give yourself time to complete your return in a relatively relaxed manner and avoid filing mistakes that happen under pressure.
Be mindful of typos
As this extension is your last chance to submit your tax return before penalties, it is crucial that you get it right or you risk losing your hard-earned money. When entering information from tax forms, documents, and receipts, take time to review what you have entered. Double-check all numbers to ensure accuracy. It is also important to review your personal information such as names, birth dates, and social security numbers.
Save your tax return
It is recommended by the IRS that all tax filers keep a copy of their return each year. Having a copy on hand can help your articulate prior and upcoming returns. Reviewing your return can also help you improve your tax outcome the next time you file.
In today’s competitive marketplace, you need an advisor who has the knowledge and experience in developing solutions to issues and challenges your company faces. Hayes & Associates provides meticulous tax preparation, compliance, consultation, and advice for individuals, businesses, partnerships, corporations, tax-exempt organizations, and trusts/estates.
