Saturday, March 6, 2010
Why You Might Want to File an Income Tax Extension By Chintamani Abhyankar
Posted by sir wil at 10:23 AMAlthough the IRS routinely grants income tax extensions and really does not care why you need one, here are a few reasons why you might consider filing an income tax extension.
Accountants are tremendously rushed from February to April. They are less busy during the months of May to October. When people are harried, they tend to make mistakes or overlook details that might be considerable. If you want your accountant to be well rested and have his or her wits fully about them, you might consider filing an extension on the paperwork.
Filing an income tax extension may be a great way to avoid an IRS Tax Audit. If you thought it was the other way around, your wrong. IRS tax auditors are issued a quota and they are expected to meet that quota every year. Returns for auditors are sorted by filing date, and it is likely that if you file late, most auditors will have already met their quotas by the time your return arrives.
Rushing to file your return is never a good idea. The more involved your income tax return is, the more schedules and attachments it will require. Waiting to file your return at a later date can help you to avoid confusion and mistakes. It is always better to file a late return than an incorrect return.
If you own a business and are funding Simplified Employee Pensions or SIMPLE IRA's, it can get quite expensive. Filing an income tax extension also extends your time to fund these retirement accounts.
It's easy to file an income tax extension on-line. There is no paper involved and you will even receive an email confirmation that the IRS has accepted your extension, something they do not give you when you file by mail.
Just remember that filing an extension is just for the sake of the paperwork. Your taxes are still due, in full, by April 15. If you are going to have trouble paying your taxes, in full, an extension will not help you. You will have to make other arrangements with the IRS.
Chintamani Abhyankar, is a well known expert in the field of finance and taxation for last 25 years. His famous Tax eBook "Stop donating your money to IRS" which is now running in its second edition, provides intricate knowledge and valuable tips on personal finance and income tax. Just visit his website http://www.planningyourtax.com/ and claim your FREE eBook
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