Tax Filing Extension - Is it the right move for you?
Filing a tax extension can be a good option for taxpayers who need a little more time to get tax documents in order. However, don't be fooled!
Filing a 6 month extension will allow for more TIME to file your tax return. It does not allow more time to PAY your tax liability. If you typically owe taxes come tax time, file by the April 15th deadline. ALWAYS! Do not extend your tax filing deadline.
The interest and penalties tacked on to your already existing tax balance can be HUGE. If you owe tax totaling $500, SURPRISE!! Now, you owe much MUCH more! Tax extensions extend time to file, not time to pay. Your tax balance, if any, is still due by April 15th, whether or not you file an extension.
Many taxpayers don't understand this concept. And trust me, the IRS loves the confusion. I can't even imagine the total interest and penalties that the IRS charges taxpayers every tax year. All of that EXTRA money they are collecting, simply because taxpayers need more time to file. Makes you wonder, where does all of that extra federal money go?
The best plan of attack is ... STAY AHEAD OF THE GAME. File by the April 15th deadline. Get prepared in January/February. Don't hold off. Time flies by and before you know it, the deadline is approaching. And now, you're pressed for time, overwhelmed and stressed out.
Tax time will happen every single year ... at the same time ... for the rest of your life. I know, I know ... daunting, right? But, it doesn't have to be. It doesn't have to be an annual cause of stress and angst. There is a better way.
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