If you are not quite ready to file your taxes yet, you may wish to request an extension to file your tax return. It can be a smart strategy, especially given these five benefits:

1. Tax laws are more complex than ever.

There are so many intricate tax regulations, if you rush to file, you may miss out on some favorable deductions or tax credits. An extension will give you time to carefully review your records and consider your eligibility for all available deductions and tax credits.

2. Filing extensions can extend the opportunity for deductions.

If you are self-employed, an extension will grant you additional time to come up with funds to maximize your retirement savings or to fund retirement contributions for your employees, which can lower your tax liability.

3. You have time to make corrections.

If you request a valid extension and then file your tax return and later discover an error, you can file a “superseding return” to correct the error. A superseding return replaces the previously filed tax return without the need for an amended tax return.

4. Avoid penalties and non-filing fees.

An extension, properly completed and accurately reporting your expected tax, can save you the cost of a late filing penalty (up to 25% of the balance owed), especially if you need additional time to pay.

5. Avoid the need to fix errors.

Form 1099s and K-1s are frequently corrected and revised. If you rushed to file and later receive a corrected 1099 or K-1, you will likely need to amend your original tax return.

Please note that filing an extension does not extend the time you have to pay your taxes. You should pay as much as you expect to owe, on or before the actual due date. If you underpay your tax, you will incur interest charges from the original due date until you pay the tax and interest in full.

You could also be subject to penalties but may be able to obtain relief for “reasonable cause” or for reporting your income with reasonable accuracy on your extension request form.

As the tax deadlines approach, consider the above and contact us to benefit from filing a tax return extension.