The Pros and Cons of Filing a Tax Extension

The tax season is getting closer and closer as we reach the holiday season. With the ending of the most wonderful time of the year, that also means the end of the last fiscal period of 2019. Are you ready or do you think you might need a little more time? 

Happy November everyone! We hope you enjoyed our most recent blog about safe shopping tips for Black Friday and Cyber Monday! As we are still heading towards all of these wonderful holidays, there is still so much to think about. Taxes need to start making their way to the top of your priorities list. With the end of 2019 looming so close, tax season will be here before you know it. Are you ready for this next tax season or do you think you might need a little more time? There is no problem with needing that extra time - that's why tax extensions can be such a relief. Do you know the pros and cons of filing a tax extension? If you're new to the process, you've come to the right place. In this blog, we will be discussing the pros and cons, which will hopefully help you decide the best route for you before April 15 is here! To begin with, you file an extension request using the IRS form 4868. You fill it out and mail it right to the IRS. 

THE PROS! 

• It's fairly easy to file a tax return. You can do it on the IRS website. Just make sure to do it as soon as possible! 
• If you are in the military serving abroad or in a similar situation, you may get an automatic extension due to the nature of the job. 
• You don't need to explain why you need an extension. 
• It moves your deadline from April 15th to October 15th! 
• Filing an extension can help reduce late penalties or avoid them completely. 
• Filing for an extension can often end up becoming a necessity not because you need time for yourself, but because you've been waiting on tax documents from your employer(s) or you need more time to organize your deductions.
• Filing gives you more time to file gift tax returns if you've been overly generous that year. 
• It allows you to still get your refund. You will have to wait for six months to get it, but you'll still get it. If you don't file or file late without an extension, you won't receive it. 
• It gives you time to decide what you can write off, provide all the paperwork to do so, and if you're qualified for the write-offs you have. 
• You don't have to rush to fill everything out and you can avoid making mistakes on your paperwork. 
• Getting an extension can save you money. Fees to pay for someone to file taxes for you close to the 15th gets more expensive the closer you hire time to tax day. After the 15th, their prices will drop back down to a much more reasonable price. 

THE CONS! 

• The extra time does not mean you have extra time to pay for your taxes, the amount you owe is still due on April 15th. 
• The extension doesn't give you more time to report on your IRA accounts. Those reports are still due on April 15th. 
• If you're married and you want to file separately you only have until the 15th to make this switch. 
• If you don't pay your taxes by the 15th, you will begin to accrue penalty fees that can add up very quickly. 
• It will delay getting your tax refund. 
• You might not know how much you owe without filling out all of your paperwork on time. If you miscalculate and don't pay enough, you'll still end up paying penalty fees. 

There you have it! The pros and cons of filing a tax extension. If you have any more questions or need to talk with us, please don't hesitate to pick up the phone. We are here to answer all of your questions and get you ready for the next step in your taxes. 

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