Last-Minute Taxes: Why Should I File a Tax Extension?
by Susannah McQuitty
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Here’s the scene: April is just 5 days away now and your unfiled taxes have you in a panic. You’re scrambling for your documents and praying it all works out, and then a friend tells you about how tax extensions give you six extra months to file. Perfect!
But then they mention that you still have to pay your taxes by April 18 if you owe.
Wait, what? Why would you want more time to file your taxes if you can’t get more time to pay them, too? Isn’t the whole point of filing your tax return to figure out how much you owe in taxes?
There are actually several great reasons to file a tax extension, whether you have a tax bill to pay or not.
Take time to dig up credits and deductions
Okay, now this looks really backwards. I just said that if you file an extension, you still have to pay taxes by the deadline if you owe. What good are credits and deductions if you’ve already paid your taxes without them? One word, ladies and gents: refund.
When you estimate your taxes, pay them by April 18, and file your return later with extra tax breaks, you could end up with a refund. After all, your refund is just whatever money you overpaid in taxes, so if you’re able to find credits and deductions after you’ve paid, you’ll get a bigger refund.
You’re getting 1099s, W-2s or K-1s late
Sometimes your employers, clients, or business interests just don’t have their act together. Sometimes mail gets delayed or lost, and sometimes your dog eats your homework – er, documents. If you need extra time to track down all those documents, filing an extension can give you just that.
Save the work for the summer
Yeah, I know thumbing through bank statements and IRS forms wasn’t exactly how you pictured spending time by the pool, but taking an extension may be a good idea if you’re filing small business taxes. Balancing your books and finding all the tax breaks you can takes time, and time is something you could probably use, especially if this is your first time filing taxes for your business. File an extension, and you’ll have several more months to make sure everything’s in order.
Life just has bad timing
Your girlfriend of 4 years just broke up with you for some dude in Denver with a man-bun. You just got promoted, and you’re working long hours doing training for the new position. Your in-laws are going to be in town the second week in April, and you’ll be cleaning from today until they step foot in the house. You get the idea. Life happens, and it doesn’t think much about taxes. Maybe life will get a little less crazy sometime between April and October – it’s worth a shot, right?
You put it off and now you’re stuck
And then there’s the chance that you simply don’t think about taxes until the April Fools jokes start rolling in. While there’s nothing particularly wrong with filing in April if you know what you’re doing, it’s a bit like waiting until you’re at the top of the rollercoaster to check your harness.
If you feel like you’re in over your head with not much time left on the clock, it’s not a bad idea to go ahead and file a tax extension.
How do I file a tax extension?
What’s the golden ticket for an extension, you may ask? It’s Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return.
If you file your extension with 1040.com, you can come back at any time before October 16 to file your federal and state return for free. Plus, filing the extension and return at the same place means the process will be that much easier. Anyone else a fan of easy?
And remember, you still have to pay your taxes by April 18. You can use 1040.com’s free tax calculator to get an estimate and go from there – just one more way that filing your taxes with 1040.com is smart and simple.
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