The NBA Finals are well underway this year. Two of the greatest teams this season, one each from the East and West conferences, square off in the most unforgettable of series to determine the national champion. Determination, sweat, and skill are what champions are made of and you too can become a champion this tax season by filing an extension with the following guidelines.
1st Quarter: File an Extension if you’re Currently Under Audit
By filing an extension while being audited, the IRS won’t be able to include the current year in their audit. That’ll start your championship series in your favor because the results of an audit may affect your current year filings.
You may have Net Operating Losses (NOL), capital losses, or any other operating expenses that could carry over and be applied to your current tax year. If the audit changes any of those numbers, it may be best to wait in order to determine the proper amounts that carry over.
In other words, keep the ball in your team’s possession until you can take the shot.
2nd Quarter: File an Extension if you Don’t Have All the Information
The primary reason most people file an extension is because they haven’t received all the information needed in order to successfully file a proper return. You don’t want to file a return with incomplete or incorrect information.
The IRS will consider such a return as late and you could be subject to fines and other penalties. It’ll be best to file an extension, get everything in order, and then file a proper return rather than jumping the gun. After all, you have to know your lineup before you make your play. Making a move on the court with the wrong information can lead to a foul; you don’t want to “foul” your “file,” get it?
Filing an extension only extends the time for filing a tax return. It does not extend the time you have to pay your taxes. You have to reasonably estimate the tax you owe and pay it by the original due date of your tax return. If not, you could incur penalties and interest rates. Even if you can’t pay the total amount on time, the penalties are less severe for failing to PAY on time rather than failing to FILE on time. Now, back to the game.
3rd Quarter: File an Extension just for Extra Time
This is probably the most obvious reason for filing an extension… just to get extra time to file your return. Your reasons may or may not be the same as the ones already discussed, but guess what? It really doesn’t matter to the IRS. The best part of filing an extension is that there’s no explanation needed as to why you need the extension. Anything can happen at anytime and that’s understandable. Ever notice how easily a game can shift in overtime?
4th Quarter: File an Extension for a Pending Status
If you requested a private letter about a ruling on a particular tax position or your current tax status, then you should consider extending your return date in anticipation of the answer from the IRS. Much like referees reviewing the last play, their ruling may just play in your favor.
Become an All-Star MVP by e-filing your tax extensions with ExpressExtensions. We offer extension forms for business tax, personal tax, and tax-exempt organizations. Download our FREE app to e-file your personal or business tax extension from any iOS or Android tablet. Or visit the mobile site to e-file your exempt organization extension from any smartphone mobile device. Either way you choose to e-file will keep your tax standing as shiny as a championship trophy.
For more assistance in e-filing a tax extension, contact our live professionals from our Rock Hill, South Carolina office. We’re available by phone Monday through Friday from 9am to 6pm EST at (803) 514-5155. You can also get in touch with email at [email protected] or live chat at www.expressextension.com.