The Most Common Tax Extension Questions
This year alone an estimate of 14million tax payers have requested to file an extension on their income taxes. While the deadline to file 2018 individual tax returns has passed, here are the most common questions people ask:
- Can you e-file your extended tax return? Yes, you can file your tax return using regular tax software.
- Can I mail in my return? Not all returns are sent to the same address. Depending on your file determines what kind of delivery service you will need. So, make sure to be thorough while reading instructions.
- Does filing an extension provided extra time to fund a retirement plan? It depends. Self-employed have the option to fund a SEP-IRA, solo 401(k) or SIMPLE-IRA plan.
- Who get more time to file? There are some extensions that are automatic to members of the military and other servicing in combat areas. They roughly have at least 180 days after they leave their base to file returns and their taxes. And there happens to be a natural disaster may be given an extension.
- Will filing an extended tax return cause an audit? Filing for extension does not trigger an audit. The IRS comprehends that taxpayers may need more time to file.
- What happens if I don’t have records to file a return? Talk to your employer and other financial institution for records. You can also check irs.gov/transcript for a record of income that has been reported to the IRS.
- Does an extension give you more time to pay? Apparently, not. The extension is only applied to filing not an extension to pay. Making your payment with your extension to avoid any interest and penalties.
- What happens if I can’t pay my tax bill? If you can’t pay, file anyhow. By filing you can avoid any repercussions. After filing, there are payment plans available.
- How long should you keep tax returns? Always keep a copy of your tax returns and supplementary documents for at least 3 years. Statute of limitations are roughly three years after the date of filing or the closing date of your tax return.
- Does it make sense to file even if I didn’t file for an extension in April? Yes, file anyways. The more time you spend putting off, the more penalties you owe. However, you won’t qualify for installment agreement or other relief options.