The Truth about Tax Extensions
Tax Day is rapidly approaching. This year it falls on April 18th for federal income tax returns. If you’re feeling stressed about filing on time, you may want to think about requesting a tax extension. Here are a few things to consider.
Your Information and Documents
Compiling tax documents and information can be tedious, especially if you’re a freelancer or run your own business. If you have a lot of paperwork to compile, had documents arrive late, or had a lot of personal changes in the last tax year, you may find an extension helpful.
Make Your Tax Filing Perfect
Filing an extension can reduce stress by avoiding the mad rush. It also allows you to take your time getting documents in order which can improve the accuracy of your return.
If you’ve moved out of the country in the last tax year, it may be advantageous to extend your time to file, especially if you haven’t qualified for the foreign earned income exclusion yet.
What a tax extension doesn’t mean:
- “If I go on extension, I can wait until the return is filed to pay.” Sorry, but Uncle Sam still wants the money. Estimate and pay your taxes by April 18th so you avoid interest and penalties.
- “Going on extension is expensive.” Nope. Not only will your return likely be more accurate because it reflects up-to-date information, but it could also mean you avoid an amended return (prepared at extra cost) if you found mistakes afterwards.
- “Filing a return after the April deadline makes me more susceptible to an audit.” Not at all. Your chances of an audit are not related to when you file. Instead, the IRS uses a scoring system to compare returns of peer groups to look for significant differences in a person’s financial data.
We understand it may feel uncomfortable if it’s your first time considering a tax extension. But arming yourself with facts and considering your entire financial picture will give you the confidence to make decisions based on your real-life needs.
If an extension is right for you, be sure to file IRS tax form 4868, Application for Automatic Extension of Time, to extend your deadline up to six months. For individuals, you can file this form online through the IRS Free File portal. And don’t forget to pay your estimated tax!
If you’re still feeling unsure whether filing an extension is the right move, please reach out to us. And remember, we have our own Eagle Wealth accounting team now for added support and expertise. Give us a call – we’re here to help.
Your Eagle Wealth Team
You’re Invited on May 6th to our Eagle Wealth Shred & Sip Event
Please drop by the Eagle Wealth parking lot for a late afternoon Shred & Sip on Friday, May 6th from 3:30 p.m. - 6:00 p.m. Come say hello to the team, enjoy drinks and small bites from Board in Bend, and meet Hans and Kim from our tax team if you haven’t had the chance to yet.
We’ve asked Data Delete of Oregon to be at our office to shred your documents for free. Afterwards, you’re welcome to leave your car in our parking lot, make a night of it, and head downtown to the First Friday ArtWalk!
Eagle Wealth to Sponsor NeighborImpact’s 2022 Foodie Crawl
For us, part of living a life we love is giving back to our community. That’s why we’re honored to be a sponsor of NeighborImpact’s 9th annual Foodie Crawl. This downtown Bend progressive dinner allows guests to set their own dining pace and taste small plates and beverage pairings from local chefs.
Not only does this fundraiser support small businesses but proceeds from The Foodie Crawl benefit NeighborImpact’s new food program warehouse, which collects and distributes more than 4 million pounds of food annually to Central Oregonians struggling with food insecurity.
Check-in begins Sunday, April 24th at 2pm outside the Commons Café and Taproom. If you’re interested in joining in on the fun, you can purchase tickets here. A few Eagle Wealth advisors will represent our team so be on the lookout for us!