Filing a Tax Extension: Your Saving Grace on Tax Day

"The 15th of April": Just saying the date out loud can be reason to cringe.

It’s tax day, and while those over achievers who filed their returns moments after receiving their W-2’s near the end of January have long-since passed off Tax Day, procrastinators the nation ‘round are suffering the blow that comes with realizing that today is … today.

Lucky for you who specialize in procrastination, the end is not as near as you may think. Saving graces exist in many forms, and for you: the tax extension. Filing a tax extension can help you avoid IRS penalties even though your taxes are not 100% complete. Here’s why.

You would be surprised at just how many people have an inaccurate understanding of what exactly a tax extension is. Perhaps, that person is you. A tax extension is essentially exactly what it sounds like: a 6-month extension for submitting your tax paperwork to avoid penalties from the IRS. However, tax extensions only apply to the paperwork portion of your income taxes, not the monetary value that you must pay in the event that you owe money for your personal or company 2014 taxes.

Therefore, estimating the amount you owe on your income taxes is vital to navigating the tax extension slope because although your tax paperwork isn’t due until October 15, 2014, however much you owe for your taxes is due on April 15 (otherwise known as today). The team at VAST gladly assists clients in need of tax estimates when filing extensions, but there are a variety of online tools you may use as well.

Assuming that either you don’t owe anything on your taxes or you have estimated the amount you owe and paid it by April 15, there are several benefits to filing a tax extension. Filing a tax extension not only offers you more time to gather the information and necessary paperwork to file, it also offers your accountant more time to thoroughly file your taxes, which can oftentimes decrease potential for error (not that VAST makes errors, how absurd).

Additionally, filing a tax extension has little to no direct correlation in warranting an audit. While nobody really knows exactly what triggers audits, there is no significant reason to worry that filing a tax extension will doom you to an audit.

Filing a tax extension is a useful, practical way to give yourself more time to file those pesky tax forms. While you still have to pay the amount you owe on your 2014 income taxes by April 15, you can find all of the information to file a tax extension online at the IRS website.

Happy Tax Day! (OK, maybe not happy).