It can happen to anyone in Nashville: you thought you had everything prepared for the tax filing and paying deadline. But, now that April 17 is drawing closer, it seems you might not get your submissions sorted after all.
Rather than risk filing an incomplete tax return, you should do the next best thing by that deadline: request for a tax extension with help from a CPA firm.
A regular request
Tax extensions – which grant another six months to file taxes – are given regularly to those who request it by the year’s original deadline. They help ensure that taxpayers file their reports correctly and comprehensively.
As a sole proprietor filing individual tax returns, you have three ways of requesting an extension:
- Filing Tax Form 4868 online
- Filing Tax Form 4868 by mail
- Paying all or part of your income tax due (or what you expect to owe) through the Electronic Federal Tax Payment System (EFTPS)
If you change your business structure to a corporation, you would do the same steps using Form 7004. The IRS provides a variety of other forms for special cases and exceptions.
A safety measure, without a stigma
Asking for an extension does not necessarily reflect oversights on your part. As the only person in charge of running your business, you would have various legitimate reasons for needing one, ranging from unexpected life events, to recent changes in your tax strategy. Even with the aid of a CPA firm, you may also simply run out of time preparing paperwork if the first quarter of the year proves very busy.
Entrepreneurs whose businesses are registered otherwise can also run into their fair share of problems: investors in partnerships or S-corporations, for example, may not receive the paperwork detailing their investments on time.
Responsibilities remain
These being said, getting an extension will not let you shelve all your responsibilities for April. Even if you would no longer be required to submit your returns until October, you must still pay your income taxes by April 17.
Do this at the same time you send your request; include your payments by mail or online. It will help you avoid or minimize penalties for late payments and ensure that the IRS won’t invalidate your extension request because you failed to pay them. Be sure you make a justifiable estimate for how much you owe.
Do not hesitate to work with your Nashville CPA firm on securing an extension. Organizing what you can in April will pay off and take away the pressure you don’t want to still feel in October!
Sources:
Filing a tax extension for small businesses, IRS.com
Extension of time to file your tax return, IRS.com
What you need to know about tax extensions, IRS.com
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