This key tax deadline is coming soon – The Motley Fool

It is not uncommon to have taxes on the brain in April, when the returns expire. But if you filed a tax extension earlier this year, now is the time to start focusing on this statement so you can submit it before the October 15th deadline. And the sooner you start raising taxes, the more fluid the process will be.

How tax extensions work

A tax extension is designed to save you more time to submit your return if you are not ready before the April deadline. If you do not owe money to the IRS, getting your late return does not pose any particular problem. On the contrary, it's when you duty late deposit money becomes a problem as this can result in severe penalties.

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Fortunately, you do not need any particular reason to file an extension. All you have to do is submit the correct form and the IRS will automatically give you six more months for your return to be returned without imposing a penalty for failure to rank, even if you make have the money from the agency.

Do not be too long

One of the main reasons why so many people need extensions is that they procrastinate on their taxes and panic at the last minute. If you are guilty of this in the past, consider it a friendly warning that allows you to advance taxes immediately.

Do not forget that the more you have to spend your taxes, the more likely you are to go wrong. And that could lead to a world of problems. On the one hand, you might forget to report the secondary income that the IRS has recorded (such as the unrelated gains recorded on a 1099 form). If this happens, your return will probably be audited, which will make it fully subject to further review.

In addition, if you leave yourself little time to complete your tax return, you risk missing key deductions and credits that could lower your IRS bill. Do not forget that, if certain deductions, such as your IRA deduction, are easy to calculate (you will usually get a form summarizing your deductible contribution for the year), others, such as contributions Charities, will ask you to browse through your records and summarize everything. you have spent. The same is true for medical expenses and professional expenses – determining these deductions can be time consuming. So do not wait to start.

Finally, keep in mind that you are not the only person who has asked for a tax extension. Therefore, if you need help from a tax preparer, asking at the last minute may not get it. And then, again, you run the risk of making a mistake and being audited, penalized or underpaid on your refund.

Prepare for this tax invoice

Another thing to note about tax extensions is that they only give you more time to submit your return. However, they do not pull you out of business when it comes to paying your unpaid tax bill. This means that if you owe money to the IRS on your 2017 return, you will owe interest back to April, by which date that statement was due to the origin. Therefore, it is helpful to determine your tax bill sooner than planned so you can develop a plan to cover it. Do not forget that the IRS will work with you if you can not fully pay the taxes you owe, but you will need to apply for a periodic payment agreement in order to avoid any further penalty.

The only thing you should never do with your taxes is to neglect them. If your 2017 return has not been submitted yet, consider this as your wake up call. And do not forget that, since the majority of filers receive a refund each year, it is highly likely that the processing of your return will produce a bundle of cash, but you will not know it before sitting down to do the job. .