This post continues Tax Extension Center’s daily series of The Top 100 Reasons to File a Tax Extension. In this series of posts, we’re doing our part to educate taxpayers how filing a tax extension can be a valuable tax season option for you or your business because it saves time, stress, and even money.
Here’s reason #92: you were using tax software and it crashed and lost your data.
Tax season is stressful for a lot of us. Most of us procrastinate, which doesn’t make things any easier. When we finally sit down to tackle our tax filing we just want things to be over. When things go wrong like when tax software fails, then that’s enough to drive you crazy.
The support team at FileLater shared with me some of their data about the reasons people share with them for filing an extension. One of the reasons they commonly hear has to do with failures in tax preparation software. The scenario usually goes something like this: persona start their filing at the last minute. Something goes wrong with their software. And all of their information is lost (meaning all of the time they just spent was wasted). Talk about stressful. That scenario is about as stressful as it gets.
In this case a tax extension makes perfect sense. The extra 6 months gives you more time to file and helps you avoid the late filing penalty that you might incur if you started your taxes all over again and filed late.
Whether you are new to filing a tax extension or you are one of the 15 million individuals and businesses that file one every year, there’s one very important thing to remember: income tax extensions do not give you more time to pay what you owe the IRS for income taxes. You are still responsible for paying what you owe by midnight on April 15 (or March 15 for the corporate taxes). An extension gives you more time to file the necessary tax forms you’re supposed to file. Failing to make your payment on time could make you subject to tax extension penalties and interest.
If you have any thoughts, comments, or questions about tax extensions let me know in the comment section below.