Resource Category: Strategies for Tax Planning

Stop searching for a reason to file a tax extension for yourself (or your business). There are a hundred reasons to request an extension and they’re listed right here for you. So if you need a reason to make yourself feel like less of a procrastinator, just use one of ours!

The good news is that you don’t need a reason to get an income tax extension. When you file for an extension, the IRS does not require you to provide a particular reason. Tax extensions are automatic ― and that’s listed as Reason #3 (in case you’re keeping track).

1. Filing a tax extension (Form 4868 for individuals, or Form 7004 for businesses) is easy.

2. If you get a tax extension, there’s less of a chance that you’ll be audited by the IRS.

3. Tax extensions are automatic and you don’t need a reason to get one ― the IRS doesn’t ask.

4. You bought or sold a house within the last year, making your life more complicated for tax purposes.

5. A tax extension gives you 6 more months to file your personal tax return.

6. More than two-thirds of U.S. taxpayers e-file their taxes these days, so why shouldn’t you e-file an extension request now and then e-file your taxes later?

7. Unemployment has made your life more complicated tax-wise and you’re not sure how your filing situation might change.

8. If you file a tax extension online, you can save that last stamp you have for Grandma’s birthday card.

9. Taxes are just too darn complicated to figure out by April.

10. There’s no penalty to filing a tax extension. But filing an extension can help you avoid certain IRS penalties.

11. This is your first time ever filing taxes.

12. You had a child last year and your tax situation is even more confusing now.

13. You just moved into a new home and you haven’t even had time to unpack yet.

14. First it was the holidays, and then came the Superbowl ― now it’s time for spring cleaning, and that comes before taxes.

15. Taxpayers who request a personal tax extension have their own special tax deadline in October.

16. You’re a business owner and you’ve been incredibly busy working to nurture and grow your company.

17. You like having options and a tax extension means you have the option to file later. You also don’t necessarily have to wait until October to file your return.

18. You secretly enjoy watching everyone else stress out while you relax during April.

19. You thought you could do your taxes without an accountant ― but boy, were you wrong!

20. It’s free to e-file a tax extension.

21. You’re going to use your CPA to file your taxes, but right now you can’t afford the rates.

22. Life is just too complicated these days and you can’t get all of the paperwork together in time.

23. You came down with a bad cold or the flu.

24. A foreclosure on your home has changed your tax situation.

25. You just became an American citizen, but you can’t even figure out where to begin with your taxes.

26. It’s good for the environment because when you e-file a tax extension, no papers or envelopes are needed.

27. You are a member of the U.S. Armed Forces and you have been deployed.

28. It’s easy to do and it takes only minutes online!

29. A dream vacation beckons ― the best fares for flights were during tax season and you don’t want to miss out on a great deal.

30. A divorce has made your life more complicated tax-wise.

31. There are just not enough hours in the day for Facebook, Twitter, Instagram, and taxes.

32. Your accountant told you to file a tax extension.

33. It’s snowing or raining, and staying in bed all day sounds like a much better idea than doing taxes.

34. Official IRS e-file providers (like FileLater.com) get 98% acceptance rates.

35. You just flat-out hate doing your taxes.

36. Your dog ate your tax paperwork.

37. You’ve been audited and it’s time for revenge.

38. You tried getting support from your tax software company, but you couldn’t get any help.

39. You’re an entrepreneur and business taxes aren’t your specialty (and you don’t want them to be).

40. By using Electronic Funds Withdrawal (EFW), you can make a tax payment with your extension to the IRS.

41. You’re out of the country and you won’t return until after the April filing deadline.

42. It’s your busy season for sales.

43. Tax extensions are inexpensive, especially compared to the penalties and interest incurred if you fail to request an extension.

44. You got married last year and that has changed your tax situation.

45. The late filing penalties for partnerships can be very expensive.

46. Long story, but… what happens in Vegas, stays in Vegas.

47. Your accountant hasn’t slept in a week because he’s been so busy with clients.

48. You’re a serial entrepreneur who has several LLCs for your rental properties.

49. You can’t afford to make a tax payment now, but you don’t want to compound the issue by not doing anything.

50. You’re missing a 1099 tax form.

51. Even if you expect a tax refund, your taxes need to be filed.

52. As long as you know your name and Social Security Number (SSN), you really can’t be rejected for a tax extension.

53. Avoid the long, annoying lines at the Post Office every tax season.

54. A death in the family has made life more complicated.

55. Millions of people file for tax extensions every year.

56. You have unresolved tax issues from previous years.

57. E-filing a tax extension means you get email confirmation from the IRS that your request has been approved.

58. You haven’t reconciled QuickBooks yet.

59. You moved and you haven’t received all of your tax documents in the mail yet.

60. Extending your business tax deadline means just one trip to the accountant.

61. Your business shuts down for March Madness.

62. You and your business partner just can’t find a time to meet.

63. You sold some stocks or other investments and that has altered your tax situation.

64. Even if your business didn’t make any money last year, you must request a tax extension if you want more time to file.

65. Filing a tax extension with FileLater is fast and your personal information is kept secure.

66. You started a new business and didn’t realize that you’re missing a lot of supporting documents.

67. Almost half of all businesses file for tax extensions, so why shouldn’t you?

68. You started a business this year and you have no idea where to begin in terms of business taxes.

69. It slipped your mind that the deadline for business taxes is in March (not April, like for personal income taxes).

70. You’re waiting for a K-1 tax form for your business return.

71. You can’t find your W-2 tax form.

72. You qualify for some federal tax credits or tax deductions, but you can’t find good information about how to apply them.

73. Your spouse is in the military and they’re the person who normally does your taxes.

74. Your accountant is going to charge you way too much for a tax extension when you can do it yourself.

75. Your car broke down and your CPA doesn’t make house calls.

76. You are out of the country for work.

77. Your doctor told you to avoid high-stress situations — so avoiding filing during busy April is better for your health.

78. You don’t have an accountant and you need more time to find one.

79. Your wife usually handles your taxes, but she’s not doing it this year.

80. You won the Lottery and you spent a lot of money this year. It’s going to be a while until your accountant finishes going through your receipts.

81. A tax extension can be e-filed directly to the IRS.

82. You bought a rental property within the last year, which has changed your tax situation.

83. Your spouse is in the process of getting their Social Security Number (SSN).

84. The lines at your local tax office are way too long.

85. You’re missing a 1099 tax form.

86. You got busted trying to do your taxes at work and you don’t want to risk getting fired.

87. You’d like to take advantage of new tax laws.

88. You want to wait until your accountant has more time and doesn’t have to rush.

89. Family obligations for Easter always get in the way of getting your taxes done.

90. Baseball season starts in early April and you need to concentrate on your fantasy team.

91. You file a tax extension online every year, so why stop now?

92. You were using tax preparation software, but it crashed and lost your data.

93. The Masters is on TV. There’s no time for taxes!

94. Your boss is making you work overtime, so you don’t have time to do anything but work right now.

95. Your birthday is in April ― you refuse to celebrate and do your taxes in the same month.

96. It’s way too nice outside today.

97. The IRS can wait!

98. Procrastination is your middle name.

99. You’re not alone ― more than 12 million people file for a tax extension each year.

100. You can’t start and finish your taxes in a single day.

If you have ever worked with an accountant who helped manage your business or personal income taxes, you know that every March and April is crunch time for them. Since the tax filing season can be so chaotic and busy, why not take the pressure off (both you and your accountant) by obtaining a tax extension? In fact, FileLater can help you request an extension online in just minutes.

Here are a few reasons to get a tax extension, and give yourself (and your accountant) some time to breathe this year.

Filing in April Can Lead to a Rushed Tax Return
When you’re up against the April filing deadline (or March for business taxes), most accountants and tax preparers don’t have all the time needed to devote to each individual client. This means that they could overlook some crucial tax credits or tax deductions that you qualify for. By obtaining a tax extension, your accountant is granted extra time to handle your tax situation and ensure that you’re claiming every tax break for which you are eligible.

Long Hours and Less Sleep Mean More Potential Mistakes
Even bus drivers are required to sleep eight hours a night ― but your accountant is not. During the rush of tax season, many accountants get pushed to the limit and end up working eighteen-hour days. A lack of sleep and concentration can mean that they’re more likely to make errors on your tax forms. Avoid potential mistakes by getting a tax extension, allowing for plenty of time to double- and triple-check your tax return.

April Filing Can Cost You More Money
Many accountants and tax preparers charge higher rates for last-minute filing, in order to discourage people from waiting until the eleventh-hour. This is done so the accountant can avoid an unmanageable workload during the last few days before tax returns are due. If you have procrastinated on getting your tax materials together, you could pay for it… unless you file for a tax extension.

Why Get In Line Behind Everyone Else?
If you are filing your taxes at the same time everyone else is, you’re likely going to be further down on your accountant’s list. You may end up spending a lot of time waiting for appointments and returned phone calls. And if you miss one… it may be near impossible to find another opening. Separate yourself from the herd and get a tax extension, giving you and your accountant more time to prepare.

No One Is Fond of Tax Season
Your accountant may make most of their money during tax filing season, but that doesn’t always put a smile on their face. March and April are the most stressful and chaotic times of year in this profession, and clients might have to deal with an overworked, cranky tax preparer. Have a more relaxing spring and request an extension of time to file your income tax return.

This year, consider giving yourself and your accountant a break. You don’t even need an account to help you request a tax extension from the IRS. Simply file your personal tax extension or business tax extension online using the FileLater system, and call your accountant in the early fall.

This is a financially difficult time for many Americans, and it’s understandable that most taxpayers want to submit their tax returns as quickly as possible in order to receive their tax refund. But remember that patience is a virtue, and filing a tax extension can be useful in many situations.

Here are five reasons why a tax extension may be good for you, particularly in a weak economy.

Reason #1
A tax extension gives you more time to find every tax credit and tax deduction that you are eligible for. In these uncertain times, you want to hold onto as much of your income as you can. By obtaining an extension of time to file, you can ensure that you’ve filed the most advantageous tax return possible.

Reason #2
Even though any tax that you owe must still be paid by the original deadline (April for individual taxpayers or March for businesses), you may discover that the interest and penalties assessed by the IRS are lower than the interest you are paying on other debts. So if you really need that money for something besides handing it over to the IRS, a tax extension allows you that option (albeit for a fee).

Reason #3
Slow and steady wins the race. In the event of a favorable change in tax laws (which happens all the time), you could suddenly become eligible for lower interest rates or additional tax deductions. It really doesn’t hurt to request a tax extension and wait to file until the fall season ― and it could end up saving you more money.

Reason #4
In times of financial uncertainty, you may have more immediate problems to deal with than your Federal income tax return. Take some of the burden off your shoulders by filing for a tax extension.

Reason #5
If you are like many Americans and the economy has forced you to change jobs, sell investments, move, or tap into your retirement account, you could probably use more time to handle your (now) more complicated tax return. The same goes for business owners who have gone through considerable infrastructure changes or must report greater losses. Give yourself some breathing room and file for an income tax extension online using the IRS-approved FileLater system. It takes just a few minutes to submit, and it gives you five or six extra months to prepare your income tax return.

Does it seem like the U.S. tax code is getting more and more complicated every year? If it feels like filing an income tax extension is more trouble than it’s worth, think again ― you can file it online in just a few minutes.

Here are five reasons why you should e-file your tax extension:

1. E-Filing Your Tax Extension Is Paper-Free
Save a tree and save yourself the hassle of filling out paper tax forms by using FileLater’s convenient e-filing system. No extra documents to deal with ― just a simple online form.

2. E-Filing Is the Only Way to Get IRS Confirmation That Your Tax Extension Has Been Approved
The FileLater system will keep track of your electronic tax extension request and inform you when it has been approved by the IRS. As a FileLater customer, you can also log in any time to check the status of your extension. On the other hand, if you file a paper tax extension request (Form 4868 for individuals or Form 7004 for businesses), there’s no way of knowing whether your extension has been approved or not — you would only be notified if your extension is rejected.

3. E-Filing a Tax Extension Is Fast and Easy
With FileLater, your tax extension form can be filled-out and submitted in just minutes. Individuals may receive an additional 6 months to file, while businesses may get 5 or 6 months (depending on the type of entity). By requesting a tax extension, you can help relieve your own April (or March) filing burden without even breaking a sweat.

4. Electronic Filing Is the Preferred Method of the IRS
Everyone is going paperless these days, and the IRS is no exception. Over 122 million returns were filed electronically in 2013. FileLater is an authorized IRS e-file provider. With the FileLater system, you can securely e-file Form 4868 or Form 7004 online. The IRS also recommends that taxpayers e-file their tax returns because it generally results in a faster tax refund.

5. With E-Filing, Nothing Gets Lost in the Mail
No more standing in line at the post office on tax day! When you e-file your tax extension request, you don’t have to worry about it slipping through the cracks in the chaos of tax season. And by using FileLater, you will get an official IRS confirmation of your tax extension and you’ll know that your tax forms are in good hands.

Don’t wait any longer! E-file your income tax extension today with FileLater!

There are lot of reasons to file a tax extension. In fact we’ve already written about the Top 100 Reasons to File a Tax Extension. But the reason that all of us can relate to is saying goodbye to April 15 and hello to October 15.

Here’s a short video about how filing a tax extension will change your tax deadline.

Do you think income tax extensions are just for people who don’t have their act together? Not quite. A personal or business income tax extension is easy to obtain and can be useful for just about any taxpayer or business owner. Whether you want more time to ensure that your tax return is accurate, or a chance to make certain that you’ve claimed all possible tax credits and tax deductions, there are many situations in which a tax extension can help.

Here are six reasons why you should consider filing an income tax extension:

1. A tax extension gives you more time to get paperwork in order.
Why rush around during the first two weeks of April if you don’t have to? With a tax extension, you can take your time and ensure that your tax return is accurate and that you’ve taken advantage of every tax benefit you’re entitled to. Many individuals and business owners file for tax extensions every year as a matter of course, just to ensure they have the time they need.

2. Your tax accountant will be able to focus on you.
If you use an accountant to file your taxes, chances are that they’re just about going insane by the end of March. Break away from the herd by requesting a tax extension and make sure you get the professional attention you’ve paid for (from someone who’s actually slept in the last week or two). Note that you don’t need a tax accountant to file for a tax extension. You can do it online yourself, right here at FileLater.com.

3. A tax extension helps you avoid the chaos of filing season.
Don’t stand in line at the post office or wait around forever to get your accountant’s attention. Getting a tax extension means you can take your time and wait until the rest of the country is done with the April deadline frenzy.

4. You might be able to take advantage of new tax laws.
Tax laws are continuously changing. If you obtain a six-month extension to file your tax return (in October) you just might be eligible for a brand new tax deduction or a change in taxpayer status.

5. A tax extension can lower your chances of an audit.
The government loves quotas, and IRS agents must audit a certain number of tax returns every year. However, they usually fill their quotas by the April filing deadline. Take yourself out of the audit pile by getting a tax extension and breathe a sigh of relief.

6. The IRS doesn’t need a reason ― so why should you?
The IRS automatically grants a six-month tax extension to anyone who accurately fills out IRS Tax Form 4868 (for personal tax returns) or IRS Tax Form 7004 (for business tax returns). So take your time with your taxes this year and file for your tax extension online in just minutes.

An IRS-approved tax extension provides you with extra time to file, but not extra time to pay any tax balance due. That doesn’t mean, however, that filing a tax extension won’t save you money.

There are up to 3 penalties you could face by not filing and/or paying what you owe the IRS on time (which is April 15 for most individuals). Here is a simple explanation of the different penalty charges.

IRS Late Filing Penalty

Also called the “failure-to-file penalty,” this fee is assessed if you owe tax and you don’t file your return (or tax extension) on time.

Fee: 5% of the unpaid tax for each month (or part of a month) that your return is overdue, up to 5 months. If your tax return is more than 60 days late, the minimum penalty is $135 or 100% of the tax due, whichever is less.

Example: For each $1,000 you owe the IRS, the late filing penalty is $50 per month.

Luckily, the late filing penalty can be easily avoided if you submit a tax extension by the original due date of your return.

IRS Late Payment Penalty

This penalty is assessed if you don’t pay all the amounts you owe on time, even if you file a tax return (or tax extension) by the proper deadline.

Fee: 0.5% of the unpaid tax for each month (or part of a month) that your tax goes unpaid, up to a maximum of 25%. If your tax balance is still unpaid 10 days after the IRS issues a “Notice of Intent to Levy,” this penalty increases to 1.0%. On the other hand, if you filed on time and you’ve set up an Installment Agreement with the IRS, the penalty decreases to 0.25%.

Example: For each $1,000 you owe the IRS, the initial late payment penalty is $5 per month. Depending on your situation, this penalty may increase to $10 per month, or decrease to $2.50 per month, for each $1000 that you owe.

IRS Interest Charges

Interest is charged on any unpaid tax, whether or not you’ve filed your tax return (or tax extension) on time. Interest compounds daily and the interest rate is determined every quarter (3 months).

Fee: The interest rate is the Federal short-term rate plus 3%. (For the first quarter of 2015, the interest rate is 3% for underpayments of tax.)

Example: For each $1,000 you owe the IRS, the interest charge is $30 (using the above 3% rate).

 

Here’a short video with more information about how a tax extension saves you money:

 

If you are unable to pay your tax balance on time, you can avoid the costly IRS Late Filing Penalty by filing for a tax extension with FileLater.

There are lot of reasons to file a tax extension. In fact, we’ve already written about the Top 100 Reasons. But maybe the best reason for getting an extension to file your taxes is that it’s automatic.

Here’s a short video explaining exactly what we mean.

The Benefits of a Tax Extension

Every year, millions of people request tax extensions from the IRS. Some of them apply for an extension even though they don’t actually need one. Although it’s always recommended that you file your taxes on time, there are several benefits of getting a tax extension.

Here are some of the biggest advantages of obtaining a tax extension:

1. It gives you more time to get organized. Despite the fact that most people are aware of the April 15th filing deadline, many taxpayers simply wait until the last minute to gather and organize the appropriate documents/information. Rather than rushing to file your return, a tax extension can give you six additional months to prepare your taxes, which should be more than enough time to get everything together.
2. There are no eligibility requirements. The IRS does not ask taxpayers why they are requesting tax extensions – they will grant you six months automatically. If you just need more time to file, no matter your reason, a tax extension is the best way to get it.
3. A tax extension can help you avoid late penalties. Remember this: an extension only gives you more time to file, not more time to pay. If you owe taxes, you must still send payment to the IRS by April 15th (the original due date for the 1040 tax return). Keep this in mind when you are filing for a tax extension using IRS Tax Form 4868 (Application for Automatic Extension of Time to File U.S. Individual Income Tax Return), because you must report any balance due in Part II of that form. Your payment should be submitted with your 4868 Form ― you will owe interest on any amount that not paid by the due date of your return (April 15).
4. Avoid the chaos of tax season. As you probably know from past experience, tax season can be hectic for everybody. With a tax extension, you can let April 15th come and go without worry. And when things die down, you can begin to work on your tax return. Additionally, it is often much easier to make an appointment with your tax professional after the height of tax season is over.

Now that you are aware of the benefits of a tax extension, it is easier to understand why so many people rely on this option. Although you probably shouldn’t request an extension unless you need one, it is a relatively simple process. Once you send the proper form to the IRS, as well as any payment that is due, you will be granted six additional months to file. Just remember that the later you file your tax return, the later you will receive your tax refund.

IRS Tax Extension Tips

Are you familiar with the tax extension process? Even if you don’t know the first thing about requesting an extension, learning how to do so is relatively easy. There are many tips you can follow to ensure that you receive a tax extension.

Tax Extension Tip #1

You must file for a tax extension using Tax Form 4868 (Application for Automatic Extension of Time to File U.S. Individual Income Tax Return) and submit it by April 15th. You should know ahead of time if you are going to need a tax extension ― do not wait until the last minute to begin preparing your taxes.

Tax Extension Tip #2

You do not need to file for a tax extension if you are due a tax refund. There is no penalty for filing past the April 15th deadline unless you owe money to the IRS. That being said, just because you are owed a tax refund does not mean you should continue to put off filing your return. If you can file your taxes on time, you should. Also note that the longer you wait to file, the longer it will take to get your tax refund.

Tax Extension Tip #3

When filling out IRS Tax Form 4868, make sure that your personal information is completely accurate. Along with this, you will need to send payment for your estimated tax liability. If you are going to make a mistake, this is probably where it will happen. Many taxpayers fill out the form but forget to remit payment along with it.

Tax Extension Tip #4

A tax extension is going to buy you six more months to file your return, leading to a due date of October 15th. Again, this does not mean that you are getting a longer time to pay what you owe.

Tax Extension Tip #5

Do you need more than six months to get your documents together and file your tax return? If so, you can include a note with Form 4868 explaining your situation and requesting additional time to file. While the IRS is strict about giving additional tax extensions, special rules may apply for taxpayers living outside the country or serving active military duty. In those cases, you may be given two more months to file, which makes your return due on December 15th.

Tax Extension Tip #6

If you need an extension for your federal tax return, there is a good chance that you’ll also need an extension for your state tax return. State rules may vary, so make sure you check with your state’s department of revenue/taxation. They will be able to give you state-specific information about filing for a tax extension.

If you find yourself needing an extension of time to file, the above tips will help you get started while also avoiding common tax extension mistakes.