When tax season arrives, many people begin scrambling to get their paperwork in order to avoid penalties for quickly receive their tax refund. If you’re realizing that filing your taxes this year is taking longer than expected, it may be beneficial to file a tax extension with the IRS so you have more time to get your documents in order. Curious how to file a tax extension?
Whether you’re filing business taxes or preparing your individual tax return, a tax extension provides you with extra time to get all of the necessary documents sorted out or more time to set up an appointment with a trusted tax professional to review your records. Join our Durham-area CPAs as they guide you on how to file a tax extension.
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What Is a Tax Extension?
A tax extension is a request for additional time to file a tax return. For many individual taxpayers, an approved federal tax extension moves the filing deadline from the usual April due date to a new October deadline.
Dates vary based on whether the usual date falls on a weekend or federal holiday, but:
- The IRS extension deadline usually falls on October 15th of the same year
- The regular tax filing deadline is usually April 15
Quick Guide: Steps to File Your IRS Extension
- Estimate your tax liability: Review your income and expenses to determine if you owe a balance.
- Choose your method: Use IRS Free File, pay through IRS Direct Pay, or mail Form 4868.
- Submit by April 15: Ensure your request is time-stamped or postmarked by the original deadline.
- Pay any taxes owed: Remember, an extension to file is not an extension to pay.
What is the Simplest Way to File a Tax Extension?
The most direct way to request a federal tax extension is to file Form 4868 electronically or make an estimated tax payment through the IRS Direct Pay system by the April deadline. This generally grants an automatic six-month extension to file your return, moving the deadline to October 15.
When Filing a Tax Extension May Be Beneficial
A Federal extension to file your taxes can be helpful when filing quickly could create a higher risk of mistakes. It gives you more time to gather records, review income, check deductions, and confirm details with your accounting professional before your return is filed.
Common reasons taxpayers request an extension include:
- Missing W-2s, 1099s, K-1s, or other tax documents
- Waiting on business income or expense records
- Needing more time to review investment, rental, or self-employment income
- Handling a more complex tax situation than expected
- Working through bookkeeping delays before a business tax return can be completed
- Confirming estimated tax payments, withholding, or prior-year carryovers
A small business tax extension can be especially useful when bookkeeping, payroll records, income statements, or partner/shareholder information are not fully ready. Filing with incomplete numbers can create more problems than taking the extra time to work with a local tax pro to check accuracy.
Filing an Extension vs Setting Up Payment Plans
| Feature | Tax Extension | IRS Payment Plan |
| Primary Purpose | More time to organize paperwork. | More time to pay a tax balance. |
| New Deadline | Generally October 15. | Varies by agreement (monthly). |
| Applies to… | The filing of the return. | The payment of the tax debt. |
| Avoids… | Failure-to-file penalties. | Immediate collection actions. |
Eligibility Requirements for an Extension of Your Federal Tax Return
Now that you know how to file a tax extension, you’re likely curious to see if you’re eligible for an extension. You may qualify to file a tax extension with the IRS if:
- You need additional time to complete and file your federal tax return
- You submit the extension request by the original tax filing due date, usually April 15th
- You properly estimate your tax liability for the year
- You pay as much of your expected tax balance as possible by the original deadline
- You understand that the extension gives you more time to file, not more time to pay
- You use an approved IRS method, such as filing Form 4868, requesting an extension electronically, or making an IRS online payment and selecting the extension option
How to File a Tax Extension Online
One way to file a federal tax extension online is to make a tax payment through an IRS online payment option and indicate that the payment is being made with an extension request. This option can be helpful if you already expect to owe taxes and want to submit an estimated payment from a bank account, debit card, credit card, or another approved payment method.
When you use this route correctly, the IRS states that you do not need to file a separate extension request form.
How to File a Tax Extension Using the IRS Free File Tool
Taxpayers can also use IRS Free File to electronically request an automatic tax-filing extension. This option can be used to request more time to file, even if you do not qualify to use Free File for the full tax return.
If you file electronically, keep the confirmation for your records. That acknowledgment can be helpful if you later need proof that the extension request was submitted on time.
How to File a Tax Extension with Form 4868
You can also file Form Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return. This form can be filed electronically through tax software, through an IRS e-filing partner, through a CPA or tax preparer, or by mail.
If you mail Form 4868, send it by the April filing deadline and keep proof of mailing. If you are estimating a tax payment with the form, review your available tax documents carefully so the estimate is as accurate as possible.
Common Questions About Filing a Tax Extension
When filing a tax extension for the first time, many taxpayers are unsure what it actually does and what responsibilities still remain before the original deadline.
Does a tax extension mean i have more time to pay my taxes?
No. A tax extension does not delay the payment deadline for taxes owed.
If you expect to owe taxes, you should estimate the unpaid amount and pay as much as you can by the original due date. If you do not pay enough by the deadline, the IRS may charge interest and a late payment penalty on the balance.
Is there a penalty for filing a tax extension?
There is no penalty simply for filing a tax extension. The issue is usually whether the taxpayer files late, pays late, or does not pay enough by the original deadline.
If you do not file your tax return or request an extension by the due date, the IRS failure-to-file penalty may apply.
What is the Failure-to File-penalty?
The Failure-to-File penalty is 5% is generally 5% of the unpaid taxes for each month or part of a month that a tax return is late. Similarly, but a bit different, the Failure-to-Pay penalty is generally 0.5% of the unpaid taxes for each month or part of a month the tax remains unpaid.
If you file an extension but do not pay the taxes owed by the original deadline, the failure-to-pay penalty and interest may still apply. That is why taxpayers who owe taxes should estimate their balance and make a payment by the April deadline whenever possible.
How do I file a tax extension if I owe taxes?
The IRS suggests that you estimate your tax bill and submit an estimated payment as soon as possible to prevent fees and interest from accumulating. Anything you owe after the tax deadline is subject to interest and a late-payment penalty. You may be able to get a reduced penalty if you pay at least 90% of your taxes owed by the deadline and pay the rest with your return.
You can estimate your tax liability by using the Estimated Tax Worksheet on Form 1040-ES, by using tax software, or by working with a professional CPA.
How do I file a tax extension if I am due a refund?
If you are due a refund, the IRS does not impose a failure-to-file penalty on tax returns that are filed late. It is still a good idea to file for a tax extension if you need extra time. For example, if you miscalculate and end up owing taxes, the tax extension will eliminate the late filing penalty.
How do I File for a state tax extension?
You can file a state tax extension through your state’s Department of Revenue or tax agency. Some states automatically accept your federal extension, while others require a separate state extension form or payment voucher. Like a federal tax extension, a state tax extension usually gives you more time to file, not more time to pay.
For taxpayers in Raleigh, Durham, and the surrounding Triangle area, staying compliant with the North Carolina Department of Revenue (NCDOR) is just as critical as federal compliance. The state generally grants an automatic extension if you received a federal extension and certify that on your North Carolina return. If you did not receive a federal extension, you may need to file Form D-410 by the original due date, and any state tax owed should still be paid by the original deadline.
Contact a Raleigh Tax Consultant to Learn More Today
Are you a business owner or an individual with complex financials who may need additional time to finish filing your taxes? Steward Ingram & Cooper, PLLC assists monthly clients with tax preparation needs, including extension requests when appropriate.
Our Raleigh CPAs take on a limited number of clients each year. To inquire about current availability and timelines, fill out the contact form below or call our office at (919) 872-0866.
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