Taxes

Tax Extensions 101 – Who Gets One? Why To Get One? How To Do It?

Stressed about taxes? Silly question, we know. And online sellers have it rough when it comes to filing on time, what with the huge box of receipts and the fifty different forms to fill out. (Okay, so 50 is exaggerating…) If only there was a way to extend the time you have to file…

Oh wait, there is! It’s called, quite aptly we might add, a tax extension, and it’s terrific. However, many have a hang-up about it, thinking it makes them lazy or a bad person.

Of course it’s not true, but the questions remain: who usually files for a tax extension? Why should you worry about doing it? How do you go about filing for an extension?

Who Gets a Tax Extension?

When it comes to the IRS, it’s almost like the IRS is Oprah back in the day: you get one, he gets one, she gets one, everybody gets a tax extension! Uncle Sam probably isn’t as excited as everybody’s favorite talk show host, of course, but he’s still awfully generous.

The vast majority of tax extensions are automatically granted, so you have nothing to worry about. And you may be one of the above who thinks filing for an extension is somehow showing that you’re slow or unable to meet a deadline. But come on – taxes are complicated and a huge monkey wrench in the day-to-day of running a business. Why do you think the IRS gives out so many extensions in the first place?

Why To Get a Tax Extension?

If you just can’t seem to get everything in order on time or are missing some key documents, go ahead and file for an extension. You’ll be surprised how good it feels to take the burden of scrambling to finish on time off your shoulders. If you extend, you’ll get an extra 6 months to get all your paperwork into the IRS.

Now, if you’re thinking of filing to push back your tax PAYMENT, you’re out of luck. Filing for an extension only pushes back the time you have to file your actual forms. Even though you’ve been granted a tax extension, you also must send in a payment of your estimated taxes by April 17th (this year’s tax day deadline). So don’t try to file so you can save money for your payment, it doesn’t work that way we’re afraid.

How To Get a Tax Extension?

Filing for a tax extension is surprisingly easy. Just grab Form 4868 and fill out some basic information: name, address, SSN, etc. Next to that is where you enter how much you estimate you owe on your taxes. This will more than likely change after your official filing and you’ll end up paying more or (hopefully) getting some back.

If your online business is officially recognized as a corporation, you’ll instead want Form 7004, which is the form for corporations to file for an extension. It’s a little more complicated than the personal extension but roughly the same idea.

If things are really looking dire and it’s the last minute, you can always use a website like TurboTax Easy Extension or FileLater.com. Though they charge a small fee, they’ll rush your extension through so you aren’t hit with any fines or penalties. Even better, they walk you through the process, so it’s even easier than before.

Have you ever filed for a tax extension?