A few years ago, I was running two small businesses, including one as a self-employed freelance writer.
Fortunately, that year, the state of California offered anautomatic tax extensionto all residents to Nov. 16.
Plus, filing late set me back on prepping for the following tax season.
Here’s what to know if you need more time to submit your return.
Why should you file an extension?
Whatever your reason, filing an extension gives you an additional six months to submit your returns.
Can you also extend the payment deadline?
Why is it better to file by the spring deadline?
There are many reasons to file your taxes by the April deadline.
Filing earlier in the year can also help you ward off identity theft, according to Berry-Johnson.
If that happens, your tax return could be rejected when you file it.
What if you might’t afford to pay your taxes on time?
Don’t avoid filing your return just because it’s possible for you to’t cover the payment in full.
You never want to be hit with penalty fees and interest charges.
There are no setup fees, but you must pay taxes owed within 180 days.
You have up to 72 months to make monthly payments to pay off your balance.
What are the penalties for not filing your taxes?
There’s a cap of 25% of your unpaid taxes.
Plus, there’s interest charged, and the interest rate changes every quarter.
How do you file an extension?
Filing an extensionis a straightforward process.
When you file an extension, some states will automatically extend your state return as well, says Berry-Johnson.
However, some states require you to file a separate extension.
How can you file your taxes on time?
In the last few years, I’ve made a point to stay on top of my accounting.
I reconcile the transactions in my QuickBooks Online account on a regular basis.
I also complete any required tasks through Gusto, my payroll service.
Here are some pointers on how to file your taxes on time for the next tax season:
