Every year brings with it new hassles of tax season filing. Most of the time tax payers are unable to get their income tax returns filed on time and even if they do try their level best they end up filing tax return with incorrect information or else missing information, which results in more tax liability and penalties. Hence, to safeguard taxpayers from such troubles, IRS came up with tax extension forms which allow taxpayers to extend their tax dates in order to get more time to file their income tax return.
Both individuals and businesses can file for tax extension forms. Individual who want to get their tax return date extended should use form 4868 and business should use form 7004. The last date for individuals to efile form 4868 is April 17th 2012 and for business tax extension form 7004 is March 15th 2012. Businesses have the option to either file for 5 month extension or 6 month extension. Business tax extension instructions will shed more light on your form 7004 filing.
Many people believe that filing for tax extension will lead to more penalties, IRS doe not approve of it, they will end up being audited by the IRS and etc. However they all are simply myths. On a brighter note, tax extension filing is recommended and provides many benefits to tax payers. Let’s focus on the benefits of tax extension filing:
6 extra months to prepare and file income tax return – Most people find it impossible to get their taxes filed on time. They either have not received all the tax documents necessary to accurately file tax return or simply don’t have time for taxes. In that case, filing for tax extension is the best option. It provides 6 more months for tax payers to collect all their tax documents and file correct and accurate tax returns. Tax extension also provides extra time to file gift tax return. Considering April 17th 2012 to be the last date to file tax return forms, hence an extension provides till October 15th 2012 to complete your tax returns.
Tax extension eliminates the risk of late filing penalty – If you apply for tax extension by the due date which is April 17th 2012, then you will NOT have to face late filing penalty which is 5% of the amount due for each month or part of a month your return is late. The maximum penalty is 25%.
Tax extension eliminates the Risk of IRS audit – When does IRS calls for an Audit? When your returns were incorrectly filed, or there was some missing information or you did not file a tax return at all. However, with tax extension you get more time to complete your filing, hence reducing your chances of getting audited by IRS.
Tax extension reduces tax preparation fees – During tax season, tax professionals and CPAs raise their fees and reduce them only when the tax filing season has gone, hence taxpayers have to pay more to get their taxes filed by April 17th 2012. If you want to save on your filing charges, then opt for tax extension. This will allow you to file tax returns through tax professionals when their charges have been reduced.
Although Tax extension has many benefits, however there is one thing all must remember. Filing an income tax extension does not allow more time to pay your tax liabilities due. You can get your tax returns extended by using efile form 7004 or form 4868, however if you have any tax dues, make sure you pay them by the income tax due date which is April 17th 2012, in order to prevent any late payment penalties.
Both individuals and businesses can file for tax extension forms. Individual who want to get their tax return date extended should use form 4868 and business should use form 7004. The last date for individuals to efile form 4868 is April 17th 2012 and for business tax extension form 7004 is March 15th 2012. Businesses have the option to either file for 5 month extension or 6 month extension. Business tax extension instructions will shed more light on your form 7004 filing.
Many people believe that filing for tax extension will lead to more penalties, IRS doe not approve of it, they will end up being audited by the IRS and etc. However they all are simply myths. On a brighter note, tax extension filing is recommended and provides many benefits to tax payers. Let’s focus on the benefits of tax extension filing:
6 extra months to prepare and file income tax return – Most people find it impossible to get their taxes filed on time. They either have not received all the tax documents necessary to accurately file tax return or simply don’t have time for taxes. In that case, filing for tax extension is the best option. It provides 6 more months for tax payers to collect all their tax documents and file correct and accurate tax returns. Tax extension also provides extra time to file gift tax return. Considering April 17th 2012 to be the last date to file tax return forms, hence an extension provides till October 15th 2012 to complete your tax returns.
Tax extension eliminates the risk of late filing penalty – If you apply for tax extension by the due date which is April 17th 2012, then you will NOT have to face late filing penalty which is 5% of the amount due for each month or part of a month your return is late. The maximum penalty is 25%.
Tax extension eliminates the Risk of IRS audit – When does IRS calls for an Audit? When your returns were incorrectly filed, or there was some missing information or you did not file a tax return at all. However, with tax extension you get more time to complete your filing, hence reducing your chances of getting audited by IRS.
Tax extension reduces tax preparation fees – During tax season, tax professionals and CPAs raise their fees and reduce them only when the tax filing season has gone, hence taxpayers have to pay more to get their taxes filed by April 17th 2012. If you want to save on your filing charges, then opt for tax extension. This will allow you to file tax returns through tax professionals when their charges have been reduced.
Although Tax extension has many benefits, however there is one thing all must remember. Filing an income tax extension does not allow more time to pay your tax liabilities due. You can get your tax returns extended by using efile form 7004 or form 4868, however if you have any tax dues, make sure you pay them by the income tax due date which is April 17th 2012, in order to prevent any late payment penalties.
