Are you considering a tax extension? If so, there are pros and cons that you should consider.
First off, your federal income tax return is due on May 17. However, suppose that deadline doesn’t suit you for some reason. Maybe you have been unable to gather the requisite documents in time. In that case, it’s pretty easy to get the due date extended to October 15.
To be granted a deadline, all you have to do is file a simple I.R.S. form or pay your taxes electronically. Make sure you act before midnight on May 17, though. ( We do it automatically for all of our clients)
Pros and Cons
Since the process is relatively simple and straightforward, should you get a tax extension? Well, it depends. There are advantages and disadvantages to pushing back your tax filing deadline. Ultimately, it comes down to your situation.
What makes sense for you? To help you answer that question, here are a few pros and cons of waiting to file your tax return.
Cons
- You might need a completed tax return for other things
- You have more time to worry about taxes
- This year’s refund will be delayed
- You still have to pay your taxes now
Pros
- You get more time to file
- You’ll have more time to seek a refund later
- You reduce the chances of getting audited
- You’ll avoid late filing fees
- You get more time to complete your accounting
- You get more time to beef up your retirement savings
If you owe taxes for 2020, and the May 17 deadline is truly concerning you? Let’s Chat! Book an appointment for a free tax assessment.
If you file your extension timely, and you had adequate withholdings from your income or made sufficient estimated payments throughout the year. You do not have to worry about penalties and interest.