5 Myths about Income Tax Extensions
Think you know everything you need to know about income tax extensions? There are several common myths that taxpayers should be aware of when it comes to requesting an extension of time to file.
Here are five of the most common misconceptions about tax extensions:
1. The IRS doesn't like it when people file for tax extensions, and they'll probably turn me down if I don't have a really good reason.
Wrong! The IRS automatically grants a 5- or 6-month extension to anyone who fills out the form correctly. They don't even ask you why ― because it doesn’t matter to them. Many taxpayers (both individuals and businesses) routinely file for tax extensions every year just to ensure accurate, advantageous returns.
2. A tax extension will make me more likely to be audited.
Quite to the contrary. Statistically speaking, your chances of an audit may actually be lower when you file for a tax extension. Many people believe that IRS agents are required to audit a certain number or percentage of tax returns every year, but they typically fill their quotas well before the October extended filing deadline. (The IRS won’t tell anyone their audit secrets, though).
3. A tax extension sounds complicated, so I'll need an accountant to handle it.
A tax extension can be requested quickly and securely on your own from the comfort of your personal computer. Filing an income tax extension is easy with the FileLater system, which helps you e-file your tax extension online in just minutes. At FileLater.com, we go beyond the tax jargon by electronically submitting the proper form for your Federal tax extension (IRS Form 4868 for individuals and IRS Form 7004 for businesses).
4. I'll be stuck waiting until October to file my taxes, even if I'm ready in June or July.
Not true. You can actually file your income tax return anytime before the due date ― whenever you're ready (although the IRS usually starts accepting returns in January). You can even submit your return before the original April filing deadline (March for businesses) if you have all your paperwork in order by then.
5. Nobody else does it.
On the contrary, more than 10 million taxpayers file for tax extensions every year! They are so common that even most State governments will automatically grant you a state tax extension if you have an approved Federal extension. A tax extension is a simple and straightforward way to give yourself more time to file the best possible tax return ― and it's easy to do online with FileLater.