Tax Extensions 101 from Outright.com
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Selling online is a job upon itself…obviously. But what makes even the most hardy ecom pros question their life’s work every now and then? Taxes, of course – especially if you can’t seem to get everything done on time.
One thing you not usually associated with the IRS, though, is ease of use and accommodation. However, if needed a little extra time to get your tax forms filled out is your major malfunction, you’re covered. The IRS has seen this problem time and time again and that’s why they allow for tax extensions.
A tax extension doesn’t just provide you with a few days or weeks, either – it’s good for six months. Even better, the vast majority of extensions are automatically granted, meaning you have very little work to do to get a little extra time for your income taxes!
How to File a Tax Extension
The form you need to file for a tax extension is Form 4868, otherwise known as the “Application for Automatic Extension of Time to File US Individual Income Tax Return.” You can print it from the link provided above or you can find it where you find other tax forms, such as your post office or library.
The form only has a few boxes for you to fill out. Simply enter your personal information like name, address, and social security number. Also be sure to include your spouse’s SSN if you’re filing together. Notice you don’t have to provide any explanation regarding filing for an extension. It’s none of the IRS’s business and they stay out of it!
Now, next to the personal info, you’ll see boxes to enter how much you owe. You may wonder how you’re supposed to tell them how much you owe before you’ve actually filled out your tax forms. However, all you have to do is give an estimate of how much you owe. (Try Outright.com if you’re totally unsure.)
After Filing an Extension
There’s one caveat to filing a tax extension – you still owe your amount due by Tax Day, which is April 17th this year. In this case, if you send in an estimated payment after filing a tax extension, your payment more than likely isn’t going to be precisely, down-to-the-cent correct. After taking in deductions and other changes, you’ll either owe less or maybe even get a refund. In this case, upon filing within six months, you’ll send in more money or receive a check.
No matter your situation and why you filed for an extension, make sure to use this time properly. Get all your papers in order and go over every document you previously filled out.
Also, be sure you don’t delay too long! Sure an extension gives you an extra six months, but that deadline is not one to be missed. After that, the IRS is really going to start digging into your business like they didn’t before. So get everything done as soon as you possibly can after you’re granted more time.
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