With tax day come and gone, many might think the pain is over. But this is not true for those of you who filed an extension with your accounting firm in Houston or local bookkeeper. And if this is your first time filing an extension, you may have tons of questions. To help you get a better understanding, we’ve listed below the five basics of filing a tax extension straight from your local tax accountant in Houston.
Six months may sound like a lot of time, but for those who could not get their forms together by April 15, the new October 15th deadline can be both a blessing and a curse. The pro of this is that you do get an entire six months in which to get your papers, forms, receipts, etc. to your bookkeeper or accountant and can even file before the deadline. The con is this deadline will be taken seriously, and very few excuses will take with the IRS if it is missed.
Although filing your taxes after April 15 might seem like it would
incur a stiff penalty, there actually is none for asking for an extension. The IRS does level plenty of penalties for not filing for an extension, missing the extension deadline, and so forth, but those of you who file for an extension and meet it will pay $0 in penalties. One of the many benefits of a tax extension, as any accountant or bookkeeper will tell you, is that you need no special reason to ask for one. Simply not having your necessary documents is reason enough for the IRS to allow you to file your taxes in October.
Some of the slyer tax payers might think that filing for an extension in which to file your taxes also translates into an extension of time to pay your taxes. This is not so. Those who owe on their taxes will be required to pay by April 15th even if they are unsure of the amount they will owe. In this case, it is best to overestimate how much you owe, pay it by April 15th, and be refunded any amount overpaid. If your bookkeeper or accountant allows you to underpay, there will be fines and such proportionate to the actual amount owed in addition to the difference of the amount you actually owe.
In a double standard move, those who get an extension to file their taxes and are owed money will see a delay in their payments. While the IRS will penalize you for not paying on April 15 if you owe money, if you are owed a refund and choose to wait until October 15 to file, they will not send you a penny until you file. But in fairness, you are the one who asked for an extension.
And as always, if you’ve filed for a tax extension and feel in over your head, please feel free to contact your Houston bookkeeper and accounting firm at 281-894-6494.