10 Tips To File Your Tax Extension In IRS


10 Tips To File Your Tax Extension IRS

10 Tips To File Your Tax Extension IRS 

When you realize that you won’t be able to file your tax return on time, the first step should be to determine whether or not you’re going to need an extension to file your tax return. That said, it’s important to be aware of some of the issues that can arise when you do apply for an extension and how it can affect your tax refund. This article provides 10 tips on how to file your tax extension IRS plea and keep the stress at bay until next year.

1) File your taxes early

This seems obvious, but you’d be surprised how many people don’t take advantage of an extra few weeks to file their taxes. The IRS will automatically grant a tax extension when you file Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return; they’ll also send you a notice asking if you want to get another six months if you’re due one or if your circumstances have changed since filing Form 4868. If it’s too late for that and you still need more time to file your taxes, then consider submitting an individual taxpayer appeal (ITA). You can request more time on your tax return until Oct.

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2) Research any credits you may be eligible for

You’re probably familiar with tax deductions; that’s money you subtract from your taxable income. But what about tax credits? You can use tax credits to reduce or even eliminate your tax bill. How much do they save you? Let’s take a look at an example of a married couple who file jointly and has two children. They earned $75,000 in 2015. As part of their tax return, they are eligible for $3,000 in federal income tax credits. That means instead of paying about $4,000 for their 2016 taxes ($75,000 x 20%), they pay just $1,500 (0% x $75,000) for 2016! The difference is big enough to buy three iPhone 7 phones!

3) Don’t procrastinate

Although you could technically file a tax extension, it’s not recommended. If you haven’t yet finished your taxes, it’s better to file an extension so that you have more time to finish up and submit your return—and before interest and late penalties kick in. Then again, if you can afford to pay what might be a hefty bill come April 15th, it’s definitely best not to delay. You may have money left over in your federal refund that could offset or reduce what you owe now. (The latter is especially true for those who qualify for earned income tax credits.) Don't procrastinate! In any case, get cracking!

4) Keep records in case you’re audited

Most taxpayers won’t need an extension. But, if you can’t get your return to the IRS by April 15, 2019, you should file a tax extension with your federal income tax return (Form 4868). If you don’t expect to owe tax and meet certain other criteria, you may be able to request a waiver of any late-payment penalties. (If, however, you have a payment agreement in place with the IRS and have previously requested an extension for filing your return but still haven't paid any taxes owed—or if that agreement has expired or is about to expire—you'll likely face penalties.) Taxpayers who are not required to file a tax return but who choose to do so should also request an extension.

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5) Rethink your withholdings

It’s common for people to think that if they have a lot of withholdings on their paycheck, it will result in a tax refund. The truth is, though, most of your income taxes are withheld from your paycheck throughout the year—not just at tax time. So if you don’t like getting a large tax refund every year, adjust your withholdings so that less money is being withheld. And when you do get around to filing your tax extension IRS plea next year and getting your new W-4 form from work, use it to increase those withholdings even more. But remember: just because you don’t like getting that big refund doesn’t mean you should automatically file an extension!

6) Conserve energy and water

If you’re trying to conserve energy and water, try swapping out your old showerhead for a newer model that uses less hot water. You can also install low-flow faucets in each of your sinks and toilets, which will help reduce waste. And remember: saving water saves money! The more efficient your home is at conserving resources like water and electricity, the lower your utility bills will be. It may seem trivial now, but it can add up over time—and every little bit helps when you’re trying to save money!

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7) Apply for education credits if you have children in school.

The American Opportunity Credit, a credit available to taxpayers who pay tuition and fees for eligible students, has been extended through 2017. The credit covers up to $2,500 of qualifying expenses per student each year. If you have children in school now or plan to send them in upcoming years, be sure to file an extension with your tax return. You'll have until Oct. 15, 2017 (extended from April 18) to claim it.

8) Review changes from the new Trump tax plan of 2018.

The Tax Cuts and Jobs Act (TCJA) made big changes to tax law in 2018, making it important for you to be aware of what’s changing and what you can do about it. Although many provisions won’t affect your tax return until next year, there are a few things you can start doing right away. Review your information here. Talk with a tax professional if you have questions or want help making sure your taxes are done properly and on time. Learn how here. File an extension if necessary so that filing your taxes isn’t a last-minute rush; consider our tips for filing an extension in less than 15 minutes! Pay estimated taxes if you had a sizable change in income; learn more about when and how to do so here.

9) Do an honest assessment of where you stand with your refund and future payments.

Whether you need to file a tax extension or not, an honest assessment of where you stand with your refund and future payments is key. If you’re using tax software, be sure to note whether your expected refund or balance due is accurate—it may be different than what you expect, depending on when your forms are processed. Always check in with your employer as well; if you expect a tax refund through a W-2 and haven’t been paid enough in salary (or in some cases at all), that balance might affect your taxes owed. Pay attention to how much federal income tax withheld and estimated payments you made as well; if these are off from what's required, it could cause issues later on down the line.

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10) And finally, please consult a qualified CPA or other financial advisor if you are unsure about filing your taxes.

Be sure to consult a qualified CPA or other financial advisor if you’re unsure about whether or not it’s necessary to file a tax extension. If you don’t have time to plan, some online tax filing services will even do it for you. Our previous post covered whether or not you should use an online tax service — and which one is right for your needs — but in short, if you are using an online service that is certified by TurboTax, they handle all of your taxes (including extensions) on your behalf without burdening you with lots of extra charges and fees. We encourage you to check out their guide on how to file an extension before proceeding as well! You can read more about that here.

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