There aren't very many ways around paying your taxes every year but at least they are one of life's two certainties that keeps you above ground. The annual tradition is a way for every hardworking American to crunch the numbers, fill out official paperwork and settle up if need be. Federal tax returns are due on April 15 or the first following business day if the 15th falls on a weekend. Naturally, there are taxpayers that wait until the absolute last minute to break out the calculator and receipts and whip up a late night tax preparation themselves, or become their accountant's worst nightmare.

 

The good news is that filing a tax extension is very simple and your tax professional can facilitate the process to make sure everything is in order. The IRS allows anyone an extension to file their taxes as long as you file the proper paperwork, namely a Form 4868 for individuals, and Form 7004 for business tax extensions.  Although you may extend your filing window, any owed income tax must still be paid in full by April 15 to avoid penalties.  Then calendar your tax extension deadline so you are sure to prepare and submit the return on time, no later than six months down the line. The exact due date for tax filing alters slightly from year to year.  Be sure to check with your tax preparer or look up the actual deadlines for the year for which you are filing.

 

A professional accountant is your best bet to make sure that the amount you pay is as accurate as possible and to make sure you meet your extension deadline by helping you organize all the necessary documentation. If you are like most people, anything beyond filing a 1040EZ is beyond the skills of most individuals, especially is they have a ownership in a business or have multiple sources of income and numerous deductibles.

 

My Dog Ate It and Other Excuses

 

There are a plethora of different reasons why one would request an extension, but it boils down to the fact that an individual or business isn't ready to file by the initial deadline. One of the most common reasons for a delay in submission is missing, incomplete or incorrect information. By law, employers must mail out income statements to employees in the form of a W-2 or Form 1099 by January 31 of each year. February 15 is the deadline for financial institutions to mail out Form 1090-B and 1090-W for stocks, bonds, and mutual funds as well as real estate transactions.

 

There are certainly unforeseen circumstances that could hinder the filing process or prevent one from focusing on it, such as a death in the family, a natural disaster or an illness. Believe it or not, many early filers often file for a tax extension strictly so they can double and triple-check their return for accuracy, usually because of the fear of getting audited. Still others choose to file an income tax extension because they believe it will increase their chances of sidestepping the possibility of an audit. This is a fairly common practice with business tax extensions.

 

Consequences And Penalties

 

If you're absolutely dedicated to procrastination, your wallet is likely to suffer on this one. There are penalties incurred in the form of a fee attached with massive interest if you aren't able to pay your taxes by the deadline, and another fee for not being able to file by the deadline. These penalties do get considerably steeper with time, with interest up to a whopping 25 percent.  These late penalties have a possibility of being waived if you have reasonable cause. You would have to make a case to the IRS or a local service center. Documentation would most likely be necessary to show you didn't just decide not to pay and/or file on time.

 

Tax preparation can be a stressful time if you're pressed for it. Income tax extensions are one way of reducing the pressure, at least temporarily. Meeting tax extension deadlines are very important if you wish to keep your extension as inexpensive as possible.