If you’ve been procrastinating when it comes to preparing and filing your tax return this year you might be considering filing an extension. While obtaining a 6-month extension to file is relatively easy–and there are legitimate reasons for doing so–there are also some downsides. If you need more time to file your tax return this year, here’s what you need to know about filing an extension.
WHAT IS AN EXTENSION?
An extension of time to file is a formal way to request additional time from the IRS to file your tax return, which in 2017, is due on April 18. Anyone can request an extension, and you don’t have to explain why you are asking for more time.
- Note: Special rules may apply if you are serving in a combat zone or a qualified hazardous duty area or living outside the United States. Please call the office if you need more information.
Individuals are automatically granted an additional six months to file their tax returns. In 2017, the extended due date is October 16. Businesses can also request an extension. In 2017, the deadline for most businesses (whose tax returns were due March 15) is September 15th (October 16 for C-corporations).
- Caution: Taxpayers should be aware that an extension of time to file your return does not grant you any extension of time to pay your taxes. In 2017, April 18 is the deadline for most to pay taxes owed and avoid penalty and interest charges.
WHAT ARE THE PROS AND CONS OF FILING AN EXTENSION?
As with most things, there are pros and cons to filing an extension. Let’s take a look at the pros of getting an extension to file first.
1. You can avoid a late-filing penalty if you file an extension. The late-filing penalty is equal to 5 percent per month on any tax due plus a late-payment penalty of half a percent per month.
Tip: If you are owed a refund and file late, there is no penalty for late filing.
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