OVERVIEW
If you need more time to complete your taxes, file a tax extension. But don't miss out on your chance for a refund by not filing at all.
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Key Takeaways • Tax extensions grant you the ability to file a completed tax return up to six months after the official tax return deadline. • Filing an extension gives you more time to file a completed tax return, but not additional time to pay taxes you may owe. • Failing to pay your taxes by the due date can result in failure-to-pay penalties. |
When are taxes due?
Every year, the IRS sets the official deadline to file your individual federal tax return as April 15. Generally, most individuals must file their Form 1040 by this date unless the date falls on a weekend or legal holiday. In this case, the due date is moved to the next business day.
Pass-through businesses must file their tax returns by March 15 of each year if they are a calendar year business, meaning they maintain a January 1 through December 31 fiscal year. If a business maintains a different fiscal year for running their business, they must file by the 15th day of the third month following the close of their tax year, unless this date falls on a weekend or legal holiday. For example, if the business has a tax year that runs from April 1 - March 31, the tax return would be due June 15 instead of March 15. If the due date falls on a weekend or legal holiday, the filing deadline also moves to the next business day. This includes partnerships and S Corporations who file Form 1065 or Form 1120S, respectively.
But you don’t necessarily need to file a completed return on your applicable tax due date. If you need more time to file your individual taxes, you can submit Form 4868: Application for Automatic Extension of Time to File U.S. Individual Income Tax Return to request an extension to file up to six months later in the year while most businesses file Form 7004: Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns. However, if you file an extension, you’re still on the hook for paying any taxes you may owe. That means estimating the taxes you owe and paying those by the original tax deadline.
What is a tax extension?
A tax extension grants either an individual or business taxpayer additional time to file a tax return if they are unable to file by the annual due date. Generally, tax extensions grant you an exemption from filing a completed tax return for an additional six months after the original due date.
A tax extension doesn't exempt you from paying the taxes you owe. If you file a tax extension, you'll still need to estimate how much you likely owe to the federal government and make a payment satisfying this tax burden. You can submit payments electronically through the Direct Pay system or by check or money order through the mail to specific locations based upon your residence. Cash isn't an accepted form of payment.
How does a tax extension work?
Filing a tax extension extends the time you have to file a completed return—not the time allowed to pay your taxes. Failing to pay taxes you owe could result in various IRS tax penalties, such as a failure-to-file penalty or a failure-to-pay penalty.
If you’re expecting a refund, you won’t pay a penalty for filing late. Instead, you’ll not receive what the IRS owes you until you file your tax return. The IRS holds onto any refunds owed to you for three years. Afterward, if you fail to file your return and claim the tax refund you’re owed, the IRS keeps your refund.
Additionally, tax extensions don’t grant you a longer period to contribute funds toward a Traditional or Roth individual retirement account (IRA) beyond the original tax deadline. One exception is when you are contributing to a Simple Employee Pension IRA. If you request an extension, you can contribute to a SEP-IRA until the extended tax deadline, generally October 15.
What happens if I file an extension and owe money?
If you owe money and file a tax extension, you should pay the money you owe. Otherwise, you might also have to pay penalties and interest on the taxes due.
TurboTax Tip: If you can’t afford to pay your taxes when they’re due, the IRS may honor your request to be placed on a payment plan, giving you an extended time frame for paying what you owe.
Do I need to file a separate state tax extension?
If you need additional time to file your federal tax return, you generally need to file Form 4868 or Form 7004 unless you meet certain eligibility criteria for receiving an automatic extension, such as serving as an active duty military member outside the U.S. or Puerto Rico.
To request a state tax extension, you’ll need to check with your state tax authority. Every state has its own rules, meaning you may need to file a separate tax extension. Some states, such as Wisconsin, Alabama, and California, offer automatic extensions to file your state income tax return without having to file any additional forms. States like New York will only grant you an extension if you request it. If you live in a state that doesn’t charge a state income tax, not only will you not need to request a tax extension, you won’t need to pay state income tax.
In any case, you’ll need to confirm the appropriate process for seeking a state tax extension by visiting the appropriate tax authority in your state.
Do you pay a penalty for filing taxes late?
If you fail to file your tax return on time and don’t file an extension, you'll likely encounter the Failure-to-File Penalty. This amounts to 5% of the unpaid taxes for each month or part of a month that a tax return is late.
How much does a tax extension cost?
Filing a tax extension is free and automatic once you file Form 4868. You don’t need to pay any fees to file and it’s approved by the IRS once you file electronically or on paper by the filing deadline.
Do military members get an automatic tax extension?
Some members of the military receive automatic tax extensions without needing to file a tax extension with the IRS. If you’re an active duty member of the military outside the U.S. or Puerto Rico, such as those who serve in a combat zone, you generally receive an automatic two-month extension without needing to file Form 4868.
To receive the automatic extension, you need to attach a statement to your tax return explaining your situation and how you qualify to receive it. If you owe tax, the IRS will still charge interest and late payment penalties from the regular due date onward.
How to file a federal tax extension with Form 4868
You can file a federal tax extension with Form 4868 in one of three ways:
- File Form 4868 electronically through e-filing on your computer directly with the IRS or through tax software
- Consult the services of a tax professional who uses e-file
- File a paper Form 4868 through the mail to the appropriate address
In the case of e-filing, you can also submit payment through the IRS Direct Pay portal or via mail by check or money order. If you send a paper Form 4868 requesting an automatic extension, be sure to include payment in the envelope or through the Direct Pay portal.
If you’re a U.S. citizen or resident taxpayer who is out of the country on the usual tax filing deadline, you're allowed two extra months to file your tax returns along with making any payments without filing an extension. However, if you use this automatic extension of time to make owed payments, the IRS will still charge you interest for the money being late, whether you request an extension or not.
If you are filing for a business, your extension is due by your regular filing deadline: March 15 or the 15th day of the third month after your fiscal year ends for partnerships or S corporations. If you are filing for a C corporation, your due date to file an extension is on April 15, or the 15th day of the fourth month following the end of the fiscal year.
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