Tax season is one of the most dreaded times of the year for everyone. Taxes need to be paid annually, since they are your contribution to the running of our state and country. Tax filing time is one of the most hectic times of year with lots of things needed to be done in a short span of time. A large number of people somehow scramble through and manage to file their taxes by the 1st deadline. Yet, what happens to people who are unable to do so?
They file a tax extension. A tax filing extension is quite simply an extension of the tax filing deadline so that you are able to complete your tax filing. For taxpayers who are concerned about completing a tax return on time or without mistakes, filing an extension is a good option. Filing a tax extension is often regarded as a tricky job- but in reality it is one of the fastest and easiest processes related to taxes. (That’s one reason why we don’t charge clients to file an extension on their behalf!) Filing an extension is nothing more than a request from you to the IRS to get an extension of the tax filing deadline. Remember, though, that the IRS regards a tax extension as ONLY that – it’s not an extension of time to pay. We’ll cover that in a little more detail below.
Here’s a step-by-step process on how to file an extension and extend your tax filing deadline.
Make a rough draft of your tax return. Creating a rough draft will help you guesstimate what your final tax return will look like when you do file it, and allows you to have a fair idea of whether you will owe tax or will be entitled to a tax refund.
The next step in filing an extension is determining which form is required. There are different extension forms for individuals and for corporations.
Individuals must file the Form 4868, also known as the “Application for Automatic Extension of Time to File US individual tax return.” This form is available on the IRS website (www.irs.gov). You can download the form, fill it out, print it and mail it in to the IRS directly. If in Step 1 you discovered that you might owe, it’s really important to send a check to the IRS for your estimated amount due. If you don’t do so, the IRS will assess a penalty. If you don’t think you’ll owe, then just mail the extension in to the IRS.
If you have a corporation, you must file Form 7004. This is also available on the IRS website.
Be sure to mail your extension to the IRS (the extension address can be found on their website) by the normal tax return deadline. For individuals, this date is usually April 15th (or the Monday after if that’s a weekend date). For corporations, the deadline is usually March 15th. Be sure the extension form is mailed through certified mail accompanied by a return receipt request.
Team Holly CPA Filed Your Extension – Or You Did. Now What?
At Team Holly CPA, we encourage our clients who believe they will receive a refund to enjoy the flexibility and lack of pressure that filing an extension brings. Individual tax returns that are extended are due by October 15th, and corporate tax returns are due by September 15th. So there’s no rush – take your time gathering what you need to file your taxes.
However, if you think that you will owe, you want to hustle and get us your tax related documents as soon as possible. The IRS starts tolling penalties and interest on what you owe on April 16th, so you really don’t want to put off filing your taxes for very long. An extension of TIME to file is NOT an extension of time to pay.
If you’re unsure about whether or not you need to file a tax extension, or if you already have and are not sure you did it correctly, contact Team Holly today! With our years of accounting experience, we can help put you on the right path, get your taxes filed ASAP, and make sure that you won’t need to file a tax extension for the 2016 tax season.
For more information or if you have questions for us, contact us here!