Tax Preparation – A Tax Entension Can Help Curb The Panic

A TAX EXTENSION CAN HELP CURB THE PANIC

The good news is that you have an extra two days to file your taxes this year… the deadline for filing taxes in 2017 is April 17th (the first business day following April 15th). But, if that deadline seems unachievable, let’s look at how you can apply for a tax extension, giving you up to an extra six months to complete and file your return.

Our experts at E&Y tax preparation talk with hundreds of clients from around the Troy, Michigan area about tax preparation and there are some common reasons that we file extension requests on their behalf:

Tax Extension Tax Law BookYou are missing or have inaccurate information: It is imperative that you have accurate information to properly file your income tax return. Sometimes your forms will arrive late or arrive with wrong information. In that case you will need to take the necessary steps to correct the information and have new forms issued to you. We recommend taking the time you need to get the information right before you file. (If you realize that information was faulty after you file we can help you submit an amendment to your return.)

You will be out of town: In today’s age of technology we don’t hear this reason as frequently, but there are a few clients who need to be home with access to their files and paperwork to accurately complete their taxes. If an extended trip out of town is unavoidable, plan ahead and file for an extension. Or better yet… file early if you can and get it off your plate! Remember if you file early, payment still isn’t due until the filing deadline.

You are going to run out of time: Even though we know that taxes are due at the same time every year, we have clients who put off the inevitable and simply run out of time to file. Just know that your new file date will be here before you know it.

You are dealing with a personal life event: There are certain life events that put taxes on the back burner and we absolutely understand. You might be dealing with an illness, death in the family, divorce or a multitude of other life events that take your focus away from your taxes. Take the time you need to get back on track and we address your taxes when you are ready.

What You Need to Know Before Thinking About Tax Preparation and a Tax Extension

While a tax extension might just be music to your ears, there are some key points that you must know:

  • An extension to file is not an extension to pay. If you owe taxes, they are still due by the filing deadline and if you to pay, you will incur penalties and interest.
  • We recommend knowing whether you are likely to have a refund or owe once your taxes are completed. If you will likely receive a refund, then no problem… go ahead and file for an extension. If you are going to owe, we recommend making your expected payment by the April 17th deadline. Even if it isn’t the full amount, you will only pay interest on the amount outstanding.
  • The penalty and interest charges can add up quickly. Remember that you can pay up to 25% of the unpaid taxes in penalties.
  • Your request for an extension may be rejected. While uncommon, if you have errors on your form or have information that doesn’t match IRS files, your request may be rejected. You will be given time to make any necessary corrections to your request – usually five business days.
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    WE NEVER RECOMMEND FILING AN EXTENSION SIMPLY BECAUSE YOU DON’T HAVE THE MONEY TO PAY YOUR TAXES. YOU will only end up owing more due to penalties and interest. Instead, let us help you talk with the IRS about a short payment extension of 60-120 days (which may still have interest but at a reduced rate) or negotiate an instalment agreement where you pay every month until the amount owing is zero.

    The bottom line is try and file by the mid-April deadline and avoid the complications of a tax extension altogether.

    We’d love to talk with you about your tax preparation and how we can meet the April 17th deadline. Our team offers year-round tax preparation service with evening, Saturday & Sunday appointments.
     
    Call Us Today 248-671-6860 or email by filling out the form below:

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