Income Tax Extension = Extra Time
Filing for a tax extension provides you with additional time to submit your tax return, but contrary to many peoples’ belief, it does NOT grant an extension on PAYING your taxes. According to the IRS, taxpayers who missed the filing deadline should submit their tax return as soon as possible after their extension and not wait until the October 15 deadline.
Here’s what you need to do after filing an extension:
Confirm
First, confirm the extension approval. If your tax preparer filed the extension on your behalf, they will ensure the extension request has been approved. If it was filed by e-file, a confirmation email message will be sent by the IRS.
Pay
If you owe any taxes, use the professionals at Adams Accounting Solutions to help you estimate any taxes owed and pay by the original deadline (usually April 15th). Paying on time can help you avoid penalties and interest on unpaid liabilities. Be sure to send in anything you owe as soon as possible because more penalties will be incurred the longer you wait.
What if You Can’t Afford to Pay?
Even if you cannot afford to immediately pay the full amount of taxes owed, you will benefit from filing your return and pay as much as possible as soon as you can. Our certified tax professionals can guide you through the IRS program where most individual taxpayers can qualify to set up an online payment plan. Believe it or not, it only takes a few minutes to apply online, and we can help you set that up via the IRS website. You’ll be notified immediately whether or not you’re approved. Once approved, the IRS online payment plan allows you to break up the amount owed into manageable chunks and gradually pay off your tax bill. Filing early also minimizes the potential for identity theft, and helps prevent errors, so carve out some time to meet with us at Adams Accounting Solutions, and we can walk you through the entire process and avoid any feelings of uneasiness.
Organize
Yes, it is important to keep your records organized and in one place so you can easily retrieve documentations such as 1099s, W-2s, receipts, investment dividend forms, and other relevant info. Since you have a few extra months, don’t procrastinate. Use this extra time to gather necessary information and get it to your tax preparer. The professionals at Adams Accounting Solutions can help guide you on the appropriate information, and how to get your hands on it.
Organize and verify all documentation.
Confused on just what all you might need? Contact us at Adams Accounting Solutions, and we will provide you with a free tax organizer which lists all documents you will need, and asks a series of questions, such as whether you were married or divorced during the tax year, if you sold or bought a house or other property, and other pertinent questions.
We can also help with advice to ensure accuracy and maximize any potential deductions or credits. Our tax pros are aware of the ever-changing tax laws and can help you take advantage of some of these tax saving measures. If you’re filing on your own, it’s possible you might overlook some ways you can save on any taxes owed, so put your trust in Adams Accounting Solutions, and we’ll work on your behalf to ensure nothing is missed.
Set Personal Deadlines to Keep Yourself Accountable
Set personal deadlines and plot them on your calendar so you can avoid putting this important task off. If you’re gathering everything you need and are in a rush, mistakes can be made, and you put yourself under undue stress. Take a cleansing breath and pace yourself to break down the tasks into manageable portions of time and you will be able to get the work done in a much less stressful manner.
Be sure to ask your tax pro at Adams Accounting Solutions about credits and deductions for which you may be eligible such as energy-saving credits, education credits and deductions for which self-employed individuals are entitled.
Review Your Overall Financial Situation
After filing an extension, a review of your investments and savings with this extra time is beneficial. This review allows you to plan for future tax years and potentially pay quarterly taxes. Planning will lead to optimal tax efficiency and a healthier financial outlook.
Update Withholding and Estimated Payments
If you owed taxes or received a large refund, talk to us at Adams Accounting Solutions and we can help you re-assess your withholding and estimated tax payments. You can adjust payroll withholding by submitting a new W-4 to your employer or altering estimated tax payments for the current year, and we can help you get this ball rolling.
Maintain Records
Finally, keep all your tax records, including copies of returns and payment receipts, organized and stored securely. This ensures that you’re prepared for any future audits or for future tax filings.
With preparation and strategic actions taken post-extension, you can effectively manage your tax responsibilities and potentially lessen the stress associated with tax season. Remember, the goal is to use this extra time wisely to ensure accuracy and compliance with tax laws. We are just a phone call away, so take a deep breath and let our certified professionals do the work!