Normally, tax returns must be filed by April 15, but 2020 was not normal in this regard. Internal revenue service United States (IRS) has postponed the deadline for filing tax returns from April 15 to July 15, but that day will come sooner than you know it, so consider replacement options. This writes Forbes.
Widely spread rumors that the IRS will take the period from 15 July to another date, but the IRS Commissioner stated that this is not in the plans. But instead of having to rush to filing taxes, you can extend the deadline until October 15. This is done automatically upon request and is incredibly easy to make. But if you should use additional time? It is tempting to succumb to the attraction of extra months on the preparation of the Declaration, but have a few questions. If you extend, you increase your chances of validation or Vice versa, maybe you actually diminish your chances to check or are they the same?
For most people, the postponement of the deadline are more terrible than the annual vanity in the preparation of the Declaration. Many people do not want to postpone this time, as overcome this goal may seem to be a crucial event every year. In fact, some people may even feel guilty if they enjoy this alluring automatic six-month extension.
In fact, in postponement there is nothing wrong. Millions of them are processed every year. Each may have an automatic extension until October 15 by completing (electronically or by mail) a tiny form. It doesn’t even require a signature. Of course, the delay is to file a tax return late, it is not an extension of the payment term. Thus, you need to pay taxes usually before 15 April, but this year — until July 15 — and the Declaration to be submitted until October 15.
Perhaps the best reason for deferral is that ne stimulates thinking. A Declaration is timely filed and served in haste, some casually, and it can lead to check. The delay of filing may allow time to collect records, review alternative reporting options and obtaining professional advice. In the end, the tax return must be signed and submitted under penalty of perjury. Better all the information to file accurately, so you don’t have to make changes later. Amendments to the Declaration often made because people are in a hurry. Of course, the amendments are not necessarily a bad thing. There are times when you can or want to change your Declaration. But try to use the fix as little as possible. Corrections will be more thoroughly explored, do it right the first time, so you don’t have to do it again.
Even the IRS should not approve a postponement of the filing. This happens in automatic mode. You will automatically receive an additional six months. Before the extension was four months and two extra months — only when there is a valid reason. But now the automatic extension valid for full six months. You may not need it all the time, and after renewal you can apply at any time from April 15 to October 15. This time can be used for other purposes. For example, the extension also allows you to correct the 1099 and K-1. Perhaps you are waiting for a form K-1, collect the documents or seek professional advice. Time is on your side.
If your Declaration there are contentious issues, such as whether the judicial recovery ordinary or capital, take the time to get professional advice. In addition, even if you have all the forms ready that if you receive a form K-1 or 1099 after filing? This often happens, and the sooner you submit the Declaration, the higher the risk of receiving a fixed forms which can require changes. Postponement of filing makes it less likely that you will be surprised by a belated amended form K-1 or 1099.
And then there are all the stories about the risk of checking. Some people say that the delay increases the risk of audit, and some say the opposite. It seems there is no hard evidence to prove any theory. However, it is worth emphasizing that there is no evidence that there is an increased risk checks if you apply for a deferment. In fact, on the contrary, given all of the advantages of deferral, it can be argued that it really can help to reduce the risk of audit. All taxpayers are worried about the risk of a check from the IRS.
However, it is unlikely that the extension of the filing increases the risk of audit. The IRS publishes data on the levels of verification on the basis of income and types of tax returns. The IRS does not publish data that can increase or decrease the risk of review. But the delay makes you unable to check everything carefully and do it right, and this in itself reduces the risk of check. So if you need a time delay might make sense. To extend filing you can file a Form 4868, ask your tax declarator to use commercial software or do it yourself in electronic form. For additional instructions, see the section 304 of the tax Declaration to the IRS that describes how to delay the time for filing a tax return.