Best Debt Companys

166 Companies 2,736 Real Customer Reviews

What to Do After You File for a Tax Extension

Posted By:  |  April 27, 2016  |  0 Comment(s)

document-428334_960_720

 

There are times when requesting an extension to file your taxes is unavoidable. Taking this step is certainly better than letting the filing deadline pass with indifference. Getting a little extra time to prepare your return may ultimately be your best short-term solution, so long as you use the time wisely.

Once your extension has been obtained, it’s important to remain proactive in handling your taxes. Procrastinating will only lead to unnecessary stress and, if you’re not careful, may result in missing your extended deadline. Falling too far behind on your return can cost you money and put you directly on the IRS’ radar.

The New Timeframe

One of the best things about getting an extension to file your taxes is the length of time you’re afforded. The extended deadline this year is October 17th, meaning you have an extra six months to get your return squared away. Put another way, you have two months more than the entire length of the official tax season. Unfortunately, this liberty can lead you to stalling until, say, the summer months when you think you’ll have more free time. This strategy is ill-advised for a number of reasons, including how much you’re eventually going to pay for that tax bill.

Slow and Steady is the Clock

A common misconception about filing extensions is that they afford you more time to pay your taxes. Although you have until October 17th to submit your return without a failure-to-file penalty, the clock starts on payment penalties and interest following the original filing deadline. This means that if you will owe once your return is completed, your actual total will need to be adjusted to include the additional monthly charges.

How to Spend Your Time

There are a number of reasons why you might have requested a filing extension. You may be waiting for income information from an employer, or perhaps you’re disputing an error from a 1099 (this frequently happens in cases where your creditor claims that a debt was reduced or written off but wasn’t). Whatever your intentions, you’ll want to address each specific task one at a time. Since you have an additional six months, you can ensure that each income detail is accurate. Also, you can take a moment to review deductions you’re taking (or consider taking them if you haven’t looked at your options). In all likelihood your to-do list can be completed quickly, and should be handled with a sense of urgency.

Deadline Lapses and Complications

While missing the original filing deadline means interest and penalties for any balance you owe, failing to meet the extended due date can create even more cost. In the event that October 17th comes and goes without your return being filed, you’re subject to a failure-to-file penalty. Additionally, the IRS can take action if you don’t. This may include filing your return for you without including credits and deductions, resulting in an exaggerated and delinquent balance. If negligence persists, you may face collection action. Your best course of action is to avoid these types of complications by tackling your tax return well ahead of the extended deadline and, if necessary, enlisting a tax professional like Optima Tax Relief to help you get it done.

<–Back to Debt Blog                                                 Next Post: Do Your Kids Owe Taxes? –>

Poll

  • How important is it to you for a debt consolidation company to offer financial education resources?
  • Takes your existing debt and try to settle with your creditors for a lower amount. If you pay off the settled amount, your debt will be considered paid in full.
  • Negotiates with your creditors on your behalf.
  • Fee based on a percentage of your total starting debt or a percentage of the debt they save you.
  • Most settlement companies have you create a separate "escrow" account where you will make monthly contributions over a certain amount of time to contribute to your settlement. Once there is a substantial amount of funds to show your creditors, the settlement company will try to negotiate a lower amount of debt.
  • Combines all your debts and creditors into one monthly payment.
  • Allows you to pay one monthly payment to the consolidation company, instead of multiple payments to different creditors.
  • You no longer owe your original creditors; instead you pay one monthly payment to your consolidation company.
  • Consolidation companies can help negotiate lower interest rates on your debts and help lower your total debt payment in the long run. A lower interest rate will lower the amount you owe in the end.
  • Allows you to consolidate all your different debts into one personal loan that can be paid off over time.
  • Can offer borrowers a lower interest rate with a longer payback term (compared to high-interest credit cards or medical bills). This will lower the amount of money required to pay off the loan over time.
  • Personal loan debt consolidation can be an effective way to raise your credit score quickly (within 3-6 months).
  • Borrowers can receive funds from their loan within only a few days.

Recently Reviewed:

Trending Blog Post:

Want us to review a company?

If there is a debt company that you don't see on our site, and would like us to review, please contact us.

Real Reviews (yes they’re real)

With so many debt relief companies out there, and a lack of sites willing to bring you the HONEST breakdowns of each company, what source can you turn to for the real information you can trust?

We are dedicated to bringing the truth out, and rank debt relief companies as they should be. Through our investigation, and experience with each company, we rank each company, and bring you our honest, unbiased opinion. We also include authentic user reviews by past customers of each company that are moderated and verified.

Like many sites, we are compensated through affiliate relationships with each company we review, however all of our rankings are based on our 11-Point Ranking Criteria.

All reviews are subject to moderation and approval. Any reviews that may resemble false information, or competitors of another company will need to be verified by our staff before being approved and published. We reserve the right to approve or deny any reviews left on this site.