Nevada is small business friendly. Most business owners are dealing with year end renewals that are still overlapping, CPA’s and tax preparers who are at capacity and to top it off….entering their busy season!

Today we’ll go through the main advantages of filing an extension.

• Extra Time to File: The most straightforward benefit is that it gives you more time to submit your tax return without facing late filing penalties. This can be especially handy if you’re still waiting on tax documents, going through personal matters, or simply need more time to get your records in order.
• Lowers Late Filing Penalties: There are essentially two deadlines on April 15th: a deadline to pay and a deadline to file. Filing an extension moves back the filing deadline, which has the steepest penalties if missed. Note: the IRS may void this if abused or if not filed along with a reasonable estimate, however, this can provide some relief.
• Fewer Mistakes: More time means fewer errors. Rushing leads to missed deductions, forgotten forms, overlooked credits, and IRS notices that could have been avoided.
• More Time for Tax Planning: One planning session per year routinely saves taxpayers a few thousand dollars & extensions make that possible. You have extra time to finalize retirement contributions, entity elections, and other strategies.
• Avoids Amended Returns: If you file and later receive a corrected 1099 or late K-1, you have to amend. Extending lets you incorporate that information the first time around. Amended returns take longer, delay refunds, and create unnecessary back-and-forth with the IRS.
• Better Access to Your CPA: Tax pros are slammed through April. After the deadline, things slow down, which means more dedicated time on your return and more room for strategy.
• Lower Audit Risk: The IRS selects most returns for audit early in the season when they have the bandwidth. By the time extended returns are filed, most audit slots are already taken.

One thing to keep in mind: The only real pitfall with an extension is missing an estimated payment. An extension moves the filing deadline, not the payment deadline. If you expect to owe, send in an estimated payment with your extension.

Note: extension paperwork & computations take time; get things going so you can take this off your plate.

-Elena Boland, Wholesale Mortgage of Nevada