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5 Tips for Tax Extension Filers

Business Finance Deadlines & Extensions Taxes
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The tax filing deadline for extension filers is slowly creeping up. If you haven’t already filed your tax return, here are a few tips to keep in mind as you race to beat the Oct. 16, 2023, deadline.

1. Review, review, and review again

This is your last chance to submit your tax return before incurring penalties. That means you need to get it right or risk losing your hard-earned money. As you enter information from your tax forms, documents and receipts, take a little extra time to review what you’ve typed in.

Double-check all numbers to ensure they are correct. Triple-check your personal information, like names, birth dates, and social security numbers, to make sure you didn’t mistype or forget a dependent.  You’d be surprised how often that happens!

2. File by the tax extension deadline to avoid tax penalties

If for some reason you can’t locate all of your tax documents to complete your return by Oct. 16, file it anyway. Yep, you heard us right. Even if you can’t find the exact number for your property tax deduction, electronically file your return anyway.

Why? Because there’s a late penalty fee if you miss the extension deadline. Late filing penalties are 5 percent of any unpaid taxes for every month your return is late (not to exceed 25 percent of unpaid taxes). The penalty applies for a full month, even if you’re only a few days late. As long as you file something, you likely won’t incur those tax penalties.

Don’t let one or two pieces of missing information stop you from completing the process. Simply make a reasonable estimate of whatever that missing amount may be and write yourself a note to check into it later.

Once you find the correct information, file an amended return. You have up to 3 years to file an amendment after you submit the original.

3. Save a copy

No matter what you file, always keep a copy of your tax return and all the corresponding tax forms, notes, and paperwork. Save a PDF copy to your computer and print a physical copy for your file folders. There’s a good chance you may never need to refer back to it, but it’s always a good idea to hold onto your tax returns for at least three years.

There are also a variety of instances in which you may need a copy. For example, if you want to buy a house or take out a loan for a car — many lenders request a copy of your most recent tax return.

4. Last call for SEP-IRA contributions

While Oct. 16, 2023, is the tax extension filing deadline, it’s also your last opportunity to contribute money to a SEP-IRA. If you’re unfamiliar, a SEP-IRA is a variation of an IRA but built for sole proprietors, freelancers, or any other type of small business owner.

If you are self-employed and have one of these funds, make any additional deposits before Oct. 16. And don’t forget to update your tax return based on your contributions. Remember — you’re funding your account for the previous tax year, not this year.

5. Plan to switch things up next year

Yes, the tax extension deadline will likely always be there for taxpayers who don’t want to deal with filing their taxes in April. However, if you traditionally default to this deadline, it may be time to consider changing your course of action when it comes time to file your tax return.

As we inch closer to the New Year, take this time to get organized for next tax season. With deductions and credits fresh in your mind, use the remaining months of the year to make some financial moves that will benefit your tax situation next time around.

 

This article is for informational purposes only and not legal or financial advice.

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