To Extend or Not to Extend, That Is the Question?
Have you looked at your calendar yet today? Have you noticed that April 15 has already come and gone? Of course, it’s pretty hard to miss tax day, but some people actually do. So should you file an extension now if you didn’t make it on time? Some people believe filing an extension is a good way to get the IRS’s attention and thus increase the likelihood of an audit. Others think the exact opposite is true. So what should you do if you’re late: extend or not? It depends.
In some cases, it might just be best to file your taxes now and pay a small late penalty. That can put the problem to rest and as long as you don’t get selected for an audit, then the case is closed. However, in other cases, filing an extension is a better option.
For example, if you are already being audited, then file an extension. This will prevent the IRS from including the current return in the audit. In addition, the audit could affect your current return; so waiting to see how it plays out could be wiser. Another good reason file for an extension is if you don’t have everything you need to file an accurate return. It’s better to get the return completely right and get it in late than to send it in promptly with incorrect information.
Turning in an incorrect return could lead to having to file and amended return and those are more likely to be audited. No matter what you choose to do, you should also be aware that filing for an extension does not mean you have more time to pay off your tax bill if you are going to end up owing money. You are still required to pay the amount you think you will owe, on time. If you overpay, then you will get a refund when you do finally file your return. But keep in mind that you might still pay a late penalty if you file for an extension after the deadline and you owe taxes.
Will Fewer Audits Lead to More Cheating?
There’s an old saying that cheaters never prosper. Of course, there are probably many people who have gotten away with cheating that would beg to differ. When it comes to taxes, however, it’s always best to avoid cheating. Surely, some people do get away with it, but if you ever get caught it could cost…
Could a Trust Be a Good Way for the Wealthy to Save on Taxes?
When you think of trusts, what comes to mind? While many people think of a financial account that is set up as part of an estate plan, there are a couple of little-known trusts that taxpayers, especially the wealthy, can use to help them save on their tax bill. These trusts are perfectly legal and…
How to Avoid Tax Preparation Scams
With so much to do and so many other important things to worry about, many people will be looking for help over the coming weeks and months with their income tax returns. While some people might just choose the first name they see to file their taxes, whom you choose can actually make a big…
What Steps Lead to an Effective Estate Plan?
Do you have an estate plan? A lot of people don’t, for a lot of different reasons. Some people would rather not discuss their death under any circumstances, other people think they are too young to worry about an estate plan, while others just don’t know, or aren’t, sure where to begin. However, it’s a…