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How, Why and When to File a Tax Extension

Written by: Bob O'Brien

Article Overview: Getting into the home stretch of tax season, or are we? For some I guess, but April 15th for many is just another day.

How, Why and When to File a Tax Extension

Getting into the home stretch of tax season, or are we? For some I guess, but April 15th for many is just another day. Just part of the ongoing tax year, and oh yeah, I have to make certain that I filed for an extension and my account with the IRS is in the black.

I have had the privilege of doing tax returns for very wealthy people and that is their attitude! They never file their taxes, on April 15th!

If you are serious about building wealth you better understand your taxes, and make certain you’ re not over paying and not under paying. Make sure you look into our Personal Finance Course.

High Net Worth people do three or four tax projections a year and generally never file a return, until the extension deadline of October 15th/6 months later.

They make a quarterly payments, and they generally always looks to defer paying taxes as long as they can in order to make certain that they earn interest on their money as long as they can. Check out the previous blog that I wrote on this topic!

Anyone can file an extension and it makes a lot of sense to do so, if you have personal situations, that keep you from doing your return by April 15th, or there has been an error with one of your forms.

Filing a tax extension does not mean, an extension of what you owe!

It is an extension to file your return, but you need to make certain that you have paid all your taxes! Otherwise you will owe interest plus penalty. I can recall telling many people this and it blows their mind. "How do I know what I owe, unless I file the return?" You send in an estimate and of course some people send in guestimates.

Better to file an extension, then not file at all, and over estimate what you think you will owe. Your money will be on deposit with the IRS and can be used to offset your 2009 liability.

I would do all you can to get that return completed by April 15th Extensions become the norm for people that are partners in businesses, because they have to wait for a lot of forms in which they will usually not receive until after April 15th.

These businesses usually provide them with them an estimate and they run a projection, file an extension and include a payment and perhaps a 10% cushion to make certain they avoid penalties.

Filing an extension is easy. In addition, you need to file for your state and any local/city taxes that require a return.


Sincerely,

Bob O’Brien

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Article Tags: attitude, blog, building wealth, extension deadline, filing a tax extension, home stretch, irs, money, norm, paying taxes, personal finance course, personal situations, privilege, quarterly payments, tax projections, tax returns
Referred by: http://www.mywealth.com



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