“Understanding Tax Extensions: Benefits, Penalties, and How to File”

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What Is a Tax Extension?

A tax extension grants you an additional six months to complete and file your federal tax return. If you can’t meet the tax filing deadline, you can request an automatic extension from the IRS.

No Extension on Payment Due

Regardless of an extension, your tax payment is due on April 15. If you file for an extension, you must estimate your taxes owed and make any necessary payment by the original deadline. If your estimated payment doesn’t cover at least 90% of the tax you owe, you may incur a late payment penalty plus interest.

No Refund Until You File

If you’re expecting a refund, you won’t be penalized for delaying your return, but you won’t receive your refund until you file your tax return.

When Are Taxes Due With an Extension?

In 2024, the original deadline to file a federal tax return is April 15, or April 17 if you live in Maine or Massachusetts. With an extension, the deadline is October 15, 2024. To get the six-month extension, you must file your request by the original deadline of April 15.

Is There a Penalty for Filing a Tax Extension?

There’s no penalty for filing an extension as long as you file it by the original deadline. However, other penalties may apply if you fail to file for an extension or pay your taxes on time.

How to File for a Tax Extension

Choose one of these three easy options for requesting an extension from the IRS:

1. Use IRS Free File: File an electronic extension request using tax software from IRS Free File. This service is free for anyone, regardless of income.
2. File Form 4868: Download and complete Form 4868. E-file it online using tax preparation software or with the help of a tax professional. You can also print and mail the form along with any payment to the address shown on the form.
3. Make an Electronic Extension Payment: When you make an online payment with the IRS and select “extension,” you don’t need to file a separate extension request. Save the confirmation information for your records.

When Filing for an Extension Isn’t Necessary

In some cases, filing an extension might not be necessary because the government automatically allows you to submit your taxes later than April 15. For example, if you have been affected by a FEMA-declared disaster, your deadline may be automatically extended. Additionally, if you are living and working outside the United States and Puerto Rico on the original due date, you may be eligible to delay your tax filing and payment until June 17, 2024.

The Bottom Line

Filing your tax return sooner is generally better. The sooner you file, the sooner you get your tax refund or settle your final tax bill. However, if you need extra time, filing for an extension is a straightforward process that gives you additional time. Just ensure you request your extension by April 15 and pay any estimated taxes to avoid penalties.

Remember, you don’t have to take the full six months to send in your return. If you can complete it sooner, you can close the books on this tax year earlier.

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