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Tax season is in full swing, and the April 18th deadline is fast approaching. But if you're one of those people who still haven't filed their taxes yet, don't panic. Here are some reasons why waiting to file your taxes might not be such a bad idea.
Taxes Are Complicated and Take Time to File Correctly
The complications, exceptions, and nuances of taxes are endless. With so many forms, deductions, and credits to keep track of, it's no wonder that mistakes can happen.
In fact, most tax returns that have to be redone are due to common mistakes such as math errors, misspellings, and missing information. Taking your time to carefully review your tax return can help you catch these errors and avoid any potential penalties.
You Can Request an Extension
If you're not quite ready to file your taxes by the April 18th deadline, you can request an extension. This will give you an additional six months to file your tax return with an extended deadline of October 15th.
However, keep in mind that filing an extension doesn't mean you don't have to pay your taxes before the deadline. You'll still need to estimate and pay any taxes owed by the April 18th deadline to avoid interest and penalties.
If you are confident you're receiving a refund, the deadline is a bit different. If you don't owe the government money, you can file your taxes up to three years after the deadline with no penalty, even if you don't request an extension.
You Could Save Money
Filing your taxes can be costly as well. Pricing for tax services fluctuates a lot during the season. If you’re paying full price for a tax service, you could very well be missing out on a solid deal. Here are a few examples:
- Early bird specials: Tax prep services and accounting firms are fortunate in the sense that "peak times" are consistent each and every year. To maximize their earnings they will offer discounts for those who are ready to file ASAP. Start looking for these in January.
- Last-minute specials: In the same breath they also can count on those that procrastinated heavily and waited until the last minute. In turn, they will offer specials and discounts to rally those that held off to get that last earnings boost before the season ends. Keep your eyes peeled for these deals in the final weeks before tax deadlines.
In both cases, you can expect to save at least $10 to $20 off the tax service's retail price. What's more, these discounts usually apply to all tiers of a tax service's online services. If history has proven one thing in the tax world, it's that there's always an incentive for those who are on the brink of filing but have yet to make the jump.
Take a look at our roundup of the best (and cheapest) current tax deals.
It Gives More Time to Save
If you owe taxes, waiting to file your tax return can give you more time to save up the money needed to pay your tax bill. You can use this time to adjust your budget and make any necessary changes to ensure you can pay your taxes on time.
Plus, the IRS offers payment plans for those who are unable to pay their tax bill in full by the April 18th deadline. By waiting to file your tax return, you can explore all of your payment options and make an informed decision on how to pay your taxes.
The Bottom Line
Waiting to file your taxes may not be the most popular decision, but it can be a smart one. Just keep in mind the deadline for tax filing in 2023 is April 18th. Meaning you need to file or request an extension before then to avoid any possible penalties.