Don't be Like the White Rabbit: Late for a Very Important Date!
Author: Jenny Shilling
Many small business owners are afraid to file for a tax extension because they think that it will increase their risk of an audit. This is one of the biggest tax preparation myths out there. The benefits of filing for an extension significantly outweigh any potential downside.
The IRS makes it easy for you or your tax preparation service to file for an extension. By submitting Form 4868 either online or through the mail, you can get up to six additional months to file your return. The key thing to keep in mind is that you do not get extra time to pay any taxes that are due -- you will need to pay those by April 15 to avoid being subject to IRS collections.
Filing for an extension has three key advantages:
- It gives you additional time to get your information together and ensures that you not only file a complete return but also that you have time to review it so that you file an accurate return.
- It moves tax preparation out of the first quarter. Many businesses have a lot of work to do during the first three months of the year, and with an extension, you can move all of that accounting work to a quieter period of the year.
- It gives you more time to fund some retirement plans, such as SEPs and IRAs. These plans let you put money away on a tax-advantaged basis, but to shelter your contributions from taxes, you have to have funded them for the tax year before you file that year's return.
While the tax experts at The Tax Office, Inc can get your return filed before April 15, they can also help you take advantage of the IRS's liberal extension policies. Talk to them to find out how to make the IRS work around your schedule instead of the other way around.
