TAX EXTENSIONS: WHEN DO YOU NEED THEM?

Stressful as it is, one way or another, you would have to file your taxes. As a business owner, it’s your responsibility to make sure this is taken care of on or before Tax Day.

Although, the IRS will actually let you request for a tax extension, given that you go through and comply with all their requirements.

Who can get a tax extension?

The main requirement for requesting a tax extension is that you file this request before Tax Day. That’s about it. However, you’ll need to speak with the IRS about your situation if you meet the following factors:

  • You live outside the United States
    • If you live outside the U.S. or if your business is outside the country, you will get an automatic 2-month extension to file your return and pay your taxes.
  • You are out of the country during the time your 6-month extension expires
  • You serve in a qualified hazardous area
    • Your deadline is automatically extended to 180 days after the last day you are in the hazardous area or combat zone.

Why would you need or want an extension?

It happens to the best of us. Sometimes, we lose sight of the things that we need to do and get disorganized. In addition, some of these financial documents require a long time to pull together. Perhaps this year, your tax situation is a bit complicated. Having another six months to handle all these documents can be quite helpful and will keep you from making mistakes.

Important

It is important to note, however, that even if you can request for an extension in filing your taxes, this does not mean you also get an extension in paying them. You will need to arrive at an estimate of how much you owe in taxes and make the payment on Tax Day.

If you feel like you’d have a hard time paying your taxes, you can consider applying to pay your tax bill in installments. File your taxes on time, then apply for a payment plan.

How do you file for a tax extension?

There is a form you need to fill out to qualify for a tax extension. It is Form 4868. You’ll have to have these information handy: your contact information, social security number, and estimated tax payment for last year, as well as payments made the previous year.

You will need to mail this form to the IRS; this address is found on the document (it may differ, depending on which state you live in).

If you are running a corporation, you would have to fill out a different form: Form 7004. It is also a very straightforward form.

This year, make sure to get your stuff together to avoid any delays in filing your tax returns. Take a deep breath, make sure you get everything right, and remember: pay your taxes on time.

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