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50. What Is a Tax Extension and Why Would I Need One?

If you don’t believe that you can get your tax paperwork together by the April deadline, then an extension is your best option. You can file Form 4868 to get some additional time to prepare and file your return.

When you serve in the military and live abroad, the IRS offers an automatic extension without needing to apply for one.

The good news is that when you request an extension, the IRS almost always grants it. You don’t even need to explain why you need one.

What the extension does not provide is more time to pay any taxes you might owe. Payments are still due by the April 15 deadline, although this request could reduce your penalties if you can’t afford to pay the amount in full.

What Do You Receive with an Extension?

Filing Form 4868 gives you up to six extra months to submit your paperwork. That means you can avoid the late filing penalty while preserving your tax refund.

If you work as a self-employed individual, there are some benefits to funding a SEP-IRA, solo 401(k), or another retirement plan. This process gives you some extra time to verify the accuracy of your information to ensure everything is complete, although it doesn’t apply to Roth or traditional IRAs.

If you need more time to be prepared for filing your Tax Return for 2019, contact us and we’ll help with this process for you.

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