Tax Extensions for 2020 Taxes and a Tax Tip

The IRS has just extended the tax filing deadline to May 17th for tax year 2020. To avoid penalties, send your return by the due date. If you owe money, mail your payment on or before the deadline.
You can always file for an extension. Unless extended by the IRS, the filing date for mailing your extension and payment is on or before October 15. You will, however, potentially be penalized on any amount of tax you owe after the due date. An extension is only an extended deadline for filing your taxes, not paying them.
Filing for an automatic five-month extension is rather easy through IRS Form 4868. If you think you will owe money, you need to estimate how much you owe and send a check with your tax form. Make sure you send your extension through certified mail, as the IRS does occasionally lose mail. In such cases, you need to provide proof that you sent your return on or before the due date. By doing so, you will avoid unnecessary penalties.
One more point, if you have not already considered solar energy for your home, now may be the time to do so. Congress recently passed a bill that extended the 26-percent tax credit for installing solar through 2022. A typical solar installation runs about $20,000. At that cost, you will receive a tax credit of $5,200 and save a substantial amount of money on your electricity. If you have a tax professional, ask for help to determine whether solar would be a good strategy for you.
If you are a client of ours, we offer you all the tax planning advice you need complimentary, which includes advice concerning tax savings on solar installation. But if you have a complex tax situation, you want to make sure you do not overpay and by taking an extension, you have created additional time to have a tax professional prepare your return and save you money.
Professional Tax Services is a locally owned provider serving over 3,500 local residents and businesses. For more information call 661-259-1967 or visit www.protaxservices.com. Through their complimentary EZ2 Thrive program, they provide unlimited free tax planning advice to their clients.