1. Who can get a tax extension?
If you’ve never filed a tax extension before, it probably seems like an elusive, I wouldn’t qualify for something like that, sort of thing. But the truth is, anyone can get a tax extension. Your boss, your grandma, your next-door neighbor and even you! And the process is actually a lot easier than you might think.
To get a tax extension on your federal income return, all you have to do is submit a Form 4868 to the IRS by April 15th. The tax form you submit says “Automatic Extension,” and by filling this, the IRS will automatically grant you extra time to file. You do not need to do anything else to file an extension.
However, don’t be confused with what a tax extension grants you. The extension is extra time to file the return, it is not an extension to pay the taxes due. You need to know how much tax you owe and be ready to submit payment by April 15th, regardless of your tax extension request. When you submit your Form 4868, you must include payment for taxes due to avoid interest, penalties, and late fees.
2. Who typically requests a tax extension?
Most working Americans receive all of the documents they need to file income taxes by the first week in February and are able to file their taxes on time. However, certain groups of people often file tax extensions:
- Those with complicated financial situations who need more time to assemble their return.
- Taxpayers who have invested in partnerships or S Corporations. They do not receive their K-1s from these entities until after April 15th. Their returns are due on September 15th with a tax extension.
- Men and women serving in the military
- Those who are out of the country for extended periods of time or who live part-time in another country
3. What are the first steps I need to take to get an extension?
If the tax deadline looks like a big, red, nearly impossible task marked on April 15th of your calendar, it’s time to take action. Be aware of your personal situation and file an extension sooner rather than later. If you know you cannot pay the amount owed in April, it is best to act early and file an extension as soon as you know you will not make the original deadline. You may want to seek professional advice or contact the IRS about your situation.
If you know you’ll be filing an extension this year there are two ways to file:
- Retrieve the Tax Form 4868 from IRS.gov and file online
- Print the Tax Form 4868, fill it out, and send it by mail
You can then pay all or part of your expected income tax due with a credit or debit card through the Electronic Federal Tax Payment System.
4. If I get a tax extension, when do I actually have to file my income taxes?
A tax extension grants you six months. This extends your due date to October 15th instead of April 15th.
5. Should I file a tax extension? Or should I just go ahead and file normally if I can?
There are always benefits to filing taxes early. We’ve discussed the increased risk of identity theft and tax scams (links) when you wait to file taxes. Not only does filing on time check a big item off your to-do list, it takes care of an inevitable bill that will have to be paid sooner or later. Just ask Mr. Ben Franklin. In this world nothing can be said to be certain except death and taxes.
However, extensions definitely serve a purpose. They allow the taxpayer extra time to gather all the necessary information so they can file accurately and on-time without paying a penalty.
Whether you need time to get your information in order or you’ve procrastinated and would just rather not file until October, the extension is an option for you, if you take the proper steps. The most important task in avoiding having to pay late fees is to estimate your tax bill and make that payment on time.