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Thursday, November 20, 2014

Simple steps to file for federal tax extension

IRS tax filing extension
IRS 6-month tax filing extensions are automatic 
By Whitney. L. Coopeir

Every time the wonderful and exciting time of filing your personal or business taxes arrives, you may need to take a few moments to regain confidence, take all the documents you had carefully prepared and put together, and fill out and file your forms.

But what if not all of your documents are in order? What if you are still missing a few important pieces to the IRS puzzle? What if you simply cannot afford the extra hour or hours to do your taxes during the time given by the Internal Revenue Service (March 17th or April 15th, depending on whether we are talking about individual or business taxes)? Well, there is good news and somewhat bad news in response to these questions, but more good than bad.

The good news: federal tax extensions

The excellent piece of news that should put many hearts at ease is that the Internal Revenue Service does provide a solution for situations when filing your taxes simply doesn’t work within the time frames that are set universally for every business and individual in the country. Everyone’s situation is unique, which is why a federal tax extension application is the step to take if you need an extra half a year to do your taxes and complete all the paperwork. The federal tax extension process is perfectly legitimate, and, importantly, it is actually called automatic, which means that the IRS does not ask you for a reason why you need an extension—as long as you fill out the application correctly and there are no typos in your name or your Social Security Number (SSN), you are granted the extension.

A word of caution: what the extension does not do

It is important to underline that the federal tax extension, if granted, is not about the actual payment of taxes, it is about doing the accurate and completely factually substantiated paperwork. If you owe the government taxes, you should still pay them before all and any deadlines to avoid fines, accruing interest and fees. The tax extension gives you an additional six months to file your tax forms and helps you to avoid the late filing fees that would otherwise come into effect, but the process does not give you an actual extension on making any payments to the IRS. The trick, however, is in the fact that, while making your extension application through a professional tax consultant, you can already do some guesswork or estimation of how much you owe in taxes and make a payment electronically at that time.

How easy is this to do?

While the Internal Revenue Service does give you the option to file the federal tax extension application either in paper format or electronically, you should be advised that when filing the old-fashioned paper way you do not receive any form of confirmation from the IRS. An electronic submission, particularly one made through an IRS-authorized and accredited professional tax consultant, is a much faster and more convenient way of applying for the extension. Thus no lengthy list of steps necessary to file for federal tax extension is needed, nor is it, in fact, possible. The process takes much less time and effort than doing the actual tax forms, but as this is also something going to the federal government, care should be taken in filling out the forms and adhering to any procedures in place.

Asking for help vs taking risks

It is perhaps timely to mention some ways in which working on this through a professional tax extension office makes much more sense than trying to do everything by yourself. For one, an extra pair of eyes never hurts, especially when these are the eyes of a person specially trained in tax forms and the entire extension process. Secondly, while the federal tax extension process is mostly automatic and nearly everyone who applies through the system gets the extension, exceptions do occur from time to time. The primary reason for rejections of the requests for an extension seems to lie in misspelled names and SSN numbers, but what if it is something more serious than that? When the IRS rejects an extension application, the applicant is given a very short time frame in which to try and apply again.

Working with a tax professional can take some of this stress away—the re-submission of your extension application after all errors have been resolved is sometimes absolutely free. When the next tax season comes to town, think about this option to make the tax time less stressful and more efficient.

About the author: This article was written by Whitney. L. Coopeir is a tax enthusiast who has helped many taxpayers file a tax extension.

Image: Geralt/Pixabay; US-PD