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Why taxpayers should consider an extension

| Apr 11, 2017 | Income Taxes

Georgia residents who need more time to file their taxes may ask for an extension. This means that those who ask for an extension on their 2017 personal tax returns won’t have to file until Oct. 16. One of the best reasons to ask for an extension is to cut down on potential late fees. The IRS charges a 5 percent late filing fee for each month that a return is late on top of any taxes owed.

By extending the deadline to file, it may be possible to extend the deadline by which a taxpayer must file a return to get a refund. In most cases, this date is three years from the original due date of the return. Those who wish to fund a SEP-IRA or any other self-employment retirement plan may benefit by filing for an income tax filing extension.

It is important to note that an IRA can be created and funded by an individual’s extended due date. However, a solo 401(k) or SIMPLE-IRA plan must be created the same year in which a potential tax break would be realized. Finally, filing a tax return extension allows for greater accuracy when submitting it. In some cases, it may allow individuals to get all necessary tax documents or otherwise check that they are accurate.

Those who have questions about their taxes may wish to talk with a tax attorney. In the vast majority of cases, the IRS will permit taxpayers to file an extension. However, it is important to understand that this is not an extension to pay taxes. Those who receive a notice from the IRS may wish to reach out to legal counsel for help.

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