Over 10 million taxpayers file for an extension every year based on reasons such as: needing more time to collect receipts, changing jobs, moving homes, or just not being able to complete their return in time. However, even though filing for an extension does buy more time to file taxes, it does not give more time to pay those taxes. You are still left susceptible to penalties and fees, even after filing an extension, if you owe money to the IRS and do not pay them by Tax Day.
After deciding to file an extension, the first thing you must take care of is paying your taxes so that you don’t end up owing more money. Make your best estimate based on your current information on how much you need to pay and go ahead and pay it. After this, you are left with one question:
What else should I take care of in the additional six months from tax day?
- Start a checklist of missing items
- Take note of your estimated amounts to check them later
- Keep notes on how you arrived at various numbers in your documents
- Keep track of your credit card receipts and make notes on them as needed
- Complete your updated and accurate return as soon as you can
While a six month extension sounds like a long time, always remember that you cannot file an extension on top of an extension. When October comes around you are fully liable to filing your taxes and it is essential to take care of them as quickly as possible. To avoid high penalties and make sure you are always up to date, allow the experts at SME CPAs to handle your tax needs for you.