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This year the tax deadline is on Monday, April 18, 2022.
Why Filing for a Tax-Filing Extension Can Benefit You:
Sending a request for a tax-filing extension can have many benefits. Here are some reasons you might want to consider applying for a tax extension this year:
1) Establish and Fund a Retirement Plan or Pension Plan (New Covid Legislation)
Independent contractors, corporate owners, and other self-employed taxpayers can set up and fund a pension plan or retirement plan for the previous year by the extended deadline as long as they’ve filed an extension.
Contact us to take advantage of this Covid Related Tax Break.
2) Time to implement tax-saving strategies for 2021
A tax-filing extension provides you additional time to make various elections on your tax return and preserve your tax refunds if you file after the extended deadline.
Our clients utilize the extension to accumulate the funds to maximize their tax-deductible pension plans.
3) Reduce Late Penalties
The IRS imposes two types of late penalties: 5% on any tax due for each month or fraction of a month that a tax return is filed late without an extension request, plus a late payment penalty of 0.5% a month, up to a maximum of 25%.
- You’ll only have to deal with one of these if you ask for an extension, and even then, only if your return indicates that taxes are due and you don’t pay at the time you file Form 4868
4) Preserve Your Tax Refund
Some people end up filing several years late, and there’s a three-year deadline for receiving a refund check from the IRS if it turns out that you’re due one. This three-year statute of limitations begins on the original filing deadline for that year (usually April 15).
The refund statute of limitations is also extended by six months when you file for an extension, which can preserve the ability of taxpayers to receive their federal tax refunds, even if they’re behind with submitting their tax returns.
5) Take Extra Time to Make Elections
A wide variety of decisions must be made when preparing your tax return. It can take some work and maybe a consultation with a professional to determine whether you’re qualified to take certain deductions and credits—and whether it’s really in your best interest.
Filing an extension gives you extra time to mull it over or seek help.
If you have any questions or want to discuss this further, please Book Your Free Assessment Here.