Make Tax Deadlines Easier By Filing for Extensions
Most Americans have a lingering sense that it should be a lot easier than it is for them to deal with their taxes. As it turns out, they’re right. The annual and quarterly nightmares we deal with are the result of simple political interests. Everyone’s got different ideas about how to fix that problem, though. Until we can come to a happy national agreement, we have to find ways to make it easier for ourselves. Fortunately, there are a couple of ways you can make your tax extension deadlines a lot less stressful.
Know The Difference Between Paying Taxes and Filing Taxes
That’s right, paying and filing are not the same thing. These two deadlines can be separated from each other. This gives you a significant amount of breathing room. By making sure your estimated payments are in on time, you can avoid a lot of trouble while you keep putting your detailed paperwork together.
That’s the key part of this point. Estimated Quarterly Payments and/or Annual Payments to the IRS have fixed deadlines. Filing a tax extension on your paperwork doesn’t change them. Your money must go to the IRS without delay; otherwise they will charge you interest based on how late it arrives. Even if you find that you don’t have on hand all the money you owe, it’s at least better to make a partial payment on time, to lower that interest.
Filing for an Extension as a Sole Proprietor
You’ve made your payment, but you still need to put the paperwork together to prove your full compliance or eligibility for a return. No problem. As it turns out, it’s more likely than not that you qualify for a six-month extension of the tax deadlines for filing.
In some specific cases, you don’t even have to file for the tax extension; it’s granted automatically. Those cases are when you’re a U.S. Citizen residing and working outside of the country or in a declared disaster zone within the country, or if you’re a member of the U.S. Military stationed outside of the country, or if you’re working in support of the military in a combat zone.
Those are very specific, though, so the rest of us will still need to file for the extension. Fortunately, it’s quite simple. The process is the same for all kinds of companies except for sole proprietorships.
For sole proprietors, you’ll probably find it most convenient to use the IRS’s own payment portal online, at https://www.irs.gov/payments. The process takes less than five minutes. You just select the “Extension” option under “Reason for Payment,” and it instantly applies.
If for some reason you do need to keep your tax extension and payment separate, though, you’ll need to fill out IRS form 4868. Either way, remember that the deadlines are April 17th for filing the extension and making your payment, and October 15th for the paperwork if you file for the extension.
Tax Extension Deadlines for All Other Types of Companies
All other types of incorporated businesses will have to use IRS Form 7004, one way or another, but you can still fill it out online.
The filing and payment deadlines for C Corporations are the same as for sole proprietors (April 17 and October 15), unless their fiscal year does not correspond to the calendar year. If that’s the case, then the first due date is on the 15th day of the fourth month following the end of the company’s fiscal year. That also makes the tax extension paperwork deadline six months after the first due date.
For partnerships and S Corporations, the deadlines are on March 15th, with the extension making the paperwork due on September 15th.
Getting Help With Your Taxes
The actual process of making the payments and filing for a tax extensions is fairly simple. What makes taxes painfully hard is gathering all the paperwork you need to justify valuable deductions. That’s where using a bookkeeping service like SyncLedgers makes a huge difference.
By helping you keep all of your business financial documentation in order, we make it far easier for you to work with your CPA to minimize your tax burdens. Contact us today to start radically simplifying and clarifying your financial situation with SyncLedgers!