How to File a Tax Extension: A Step-by-Step Guide
You’ll only have to deal with one of these if you ask for an extension, and even then only if your return indicates that taxes are due, and you don’t pay at the time you file Form 4868. Taxpayers in various parts of the U.S. were granted extensions as part of IRS tax relief in the wake of storms in Alabama, California, Georgia, and elsewhere. You can consult IRS disaster relief announcements to determine your eligibility. Certain people—such as members of the military serving abroad—receive an automatic extension without having to apply or File Form 4868. You don’t have to explain to the IRS why you need the extension; simply file the form. As with most things IRS-related, the key is to know the rules, weigh the pros and cons, and make an informed decision.
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Your unpaid taxes also accrue interest from your return’s due date to whenever you pay them in full. The rate is the federal short-term rate plus 3% and updates quarterly. Taxpayers, including civilians working with the Department of Defense, must notify the IRS directly of their status for qualifying combat zone relief. For more information, see Notifying the IRS by email about Combat Zone Service. You have at least 180 days after you leave the designated combat zone/contingency operation to file and pay taxes.
Don’t Miss the Tax Deadline! File for a Tax Extension Before the April 15 Deadline Hits
- Though interest and late-payment penalties continue to accrue on any unpaid taxes after April 15, the failure to pay penalty is cut in half while an installment agreement is in effect.
- However, if you don’t pay your taxes on time or in full, or if you don’t file at all, you could be hit with a payment penalty.
- For example, if you need an extension for estate taxes, you might need Form 4768.
- The fast, streamlined online process makes filing simple, so you can avoid penalties and get extra time to prepare.
There is no need to file a separate Form 4868 extension request when making an electronic payment and indicating it is for an extension. Although the IRS doesn’t reject many extensions, it is possible that your extension request gets rejected. Most of the time, this is just due to incorrect information or typos, and the IRS gives you five days to fix the error(s) and resubmit your form that was timely e-filed but later rejected. Under special circumstances, this date might be a little different. For example, if you’re a U.S. citizen or resident alien and you’re living or stationed outside of the country, you’re allowed an automatic two-month extension from the regular due date.
If day 15 falls on a Saturday, Sunday or legal holiday, the due date is delayed until the next business day. Your return is considered filed on time if your envelope is properly addressed, postmarked and deposited in the mail by the due date. Most reputable tax preparation software is set up to file an extension for you as well. You’ll receive a confirmation code from the IRS notifying you that your extension was received if you submit Form 4868 electronically. Some deadlines remain carved in stone, regardless of when you file your return. Price-sensitive taxpayers can save money on tax prep by shifting tax preparation to a time when their accountant is less busy and charging a lower fee.
- This option is ideal for people who owe federal taxes and want to skip additional forms, but they still must ensure their full tax return is filed by October 15.
- If you don’t follow the steps properly—for example, if you underestimate the taxes you owe—you’ll be subject to interest and penalties (more below).
- In some cases, a failure-to-file penalty may be applied to the tax return.
- Make a good-faith estimate of what you owe to avoid underpayment penalties and interest on any outstanding balance.
- The fastest and easiest option is to file a tax extension online through the IRS Free File service.
Can’t pay your taxes by April 15? Still file for a tax extension
To avoid penalties, pay at least 90% of your tax liability by the original filing deadline. You can make payments online through the IRS Direct Pay service, by debit or credit card, or by mailing a check or money order. For most taxpayers, the filing deadline for 2024 federal taxes is April 15, 2025. If you need more time to get your return together, you can request an extension to Oct. 15, 2025. Filing a tax extension can help you push your 2024 tax deadline to October 15, 2025. Thankfully, there are easy options for filing an extension, like e-filing with TurboTax Easy Extension or mailing IRS Form 4868.
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Most taxpayers qualify for electronic Filing An Income Tax Extension filing at no cost and, when they choose direct deposit, usually receive their refund within 21 days. Even if you can’t pay your taxes on time, you should still file for an extension. By doing so, you’ll avoid penalties for filing late, which amount to 5 percent of the taxes due each month. (The penalty maxes out at 25 percent.) You’ll still get hit with a monthly 0.5 percent penalty (up to 25 percent), plus interest, until you pay your taxes, but the sting won’t be as bad.
How to File a Tax Extension: A Step-by-Step Guide
A wide variety of decisions must be made when you’re preparing your tax return. It can take some work and maybe a consultation with a professional to determine whether you’re actually qualified to take certain deductions and credits—and whether it’s really in your best interest. Filing for a tax extension is a straightforward process, and there are several methods to do so. Typically, the IRS grants an automatic six-month extension, pushing the deadline from April 15 to October 15. Filing taxes can be a daunting task, especially when life’s complexities delay your ability to submit your return by the standard deadline. Vyde is a licensed accounting firm (CPA) based in Provo, Utah, and members of the AICPA.
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Understand the steps, potential penalties, and how to pay any taxes owed by April to avoid interest. It’s important to note that while a tax extension gives you more time to file your return, it does not extend the time to pay any taxes owed. You’ll need to estimate and pay any owed taxes by the original filing deadline to avoid interest and penalties. To use Direct Pay, visit the IRS website, select “Extension” as the reason for payment, enter the estimated tax amount owed, and submit the payment.
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Other options to pay, such as getting a loan or paying by credit card, may help resolve a tax debt. Most people can set up a payment plan on IRS.gov to pay off their balance over time. By filing either a return on time or requesting an extension by the April 15 filing deadline, people avoid the late-filing penalty, which can be 10 times as costly as the penalty for not paying. They’re free to file and you won’t have to pay more on your taxes for filing late if you use a federal extension if you pay at least 90% of the total tax due by the original due date of the return. Plus, if a little more time makes it easier to claim the right tax credits or make sure you’ve covered all your bases, there’s no reason to skip this valuable opportunity.
If you file the proper forms, you could get six more months to file your tax return. However, there are some specific rules and requirements to be aware of — especially if you want to avoid the possibility of a penalty. If you live outside the U.S. and Puerto Rico, you’re allowed an extra two months to file your return and pay any amount due without requesting an extension, bringing your filing deadline to June 15. The same is true for those in military or naval service outside the U.S. and Puerto Rico. It’s important to keep in mind an extension only pushes back the due date for the filing of your tax documents.
A common question is, “how much does it cost to file a tax extension? ” The good news is that filing for an extension itself is completely free, but if you owe taxes and don’t pay by April 15, penalties and interest will begin to accrue. If you’re preparing a final tax return for a family member who passed away right at the end of the tax year, you might need some time to gather documents. Or if you have a serious illness or other emergency that precludes your ability to get those taxes done, you may wish to estimate and pay what you think you owe and complete your return by the extension date. If you owe additional taxes when you file your late return, you’ll have to pay interest no matter what. But if you pay the remaining balance with your return on October 15, and you had paid at least 90% of your total taxes before April 15, you can write an appeal to the IRS to avoid the penalty.