Frequently Asked Questions About Filing a Tax Extension

Tax season can be a stressful time, especially if you're not quite ready to file your return by the deadline. Fortunately, the IRS provides an option to ease the pressure: filing a tax extension. 

What is a Tax Extension, and Why Do I Need One?

A tax extension is an extension of time to file your tax return, giving you an additional 6 months to prepare and submit your documents accurately. It does not extend the deadline for paying any taxes you owe. 

You might need an extension if you face unforeseen circumstances, have a complex financial situation, or require more time to gather necessary documents.

Frequently Asked Questions About Tax Extension Deadlines

Tax extensions result in changes to the deadline for filing your taxes. 

In this section, we look at everything you need to know about the deadlines for filing a tax extension and the new deadlines once an extension has been approved. 

When is the Tax Filing Deadline?

The typical deadline for filing federal income tax returns for individuals and most businesses is April 15th. However, if the 15th falls on a weekend or a holiday, the deadline may be extended to the next business day.

How Long is the Extension Period?

Filing for a tax extension usually grants you an additional 6 months to file your tax return. For most taxpayers, this means the extended deadline is October 15th. However, if your tax year is different from the calendar year, your extension deadline may vary.

What Happens if I Miss the Original Filing Deadline and Don’t File for an Extension?

If you miss the original filing deadline and fail to file for an extension, the IRS may impose penalties and interest on any taxes you owe. It’s always better to file an extension and pay as much of your tax liability as possible by the original filing date to minimize penalties.

What Happens if I Don’t File My Return by the Extended Deadline?

If you do not file your tax return by the extended deadline, you risk incurring additional penalties and interest. It’s essential to use the extension period wisely and complete your return accurately and promptly.

Can I File My Tax Return After the Extended Deadline?

Yes, you can file your tax return after the extended deadline. However, it’s essential to remember that the IRS may impose penalties and interest on any taxes owed, especially if you’ve missed the original deadline and didn’t pay on time.

Can I Request Multiple Extensions?

In most cases, you can only request one extension, which grants you an additional six months to file your tax return. However, if you have a compelling reason and meet specific requirements, you may be able to request an additional extension.

Frequently Asked Questions About How to Submit a Tax Extension

In order to submit a tax extension, you’ll either need to complete Form 4868 or e-file your tax extension online. This section will look at questions associated with actually completing and submitting a tax extension.

What Form Do I Use to File for an Extension?

For federal income taxes, individuals and most small businesses use Form 4868 to request an extension. If you’re a corporation or partnership, you’ll need to file Form 7004. Keep in mind that some states have their own extension forms, so check with your state’s tax agency for specific requirements.

How Do I File for an Extension?

To file for an extension, you’ll need to complete the appropriate extension form and submit it to the IRS or your state tax agency. 

The easiest and most efficient way to file an extension is by using IRSExtension online’s simple online filing form. Using the online form ensures that your information is accurate and received by the IRS quickly.

Do I Need to Provide a Reason for the Extension?

No, the IRS does not require you to provide a specific reason for requesting an extension. It is your right to request one, and the IRS generally grants it automatically, provided you file the request on time.

Can I E-File My Extension Request?

Yes, it’s faster and more secure to file your extension online. Filing online will result in your information being sent immediately to the IRS without the risk of sending secure information through the mail. Get started filing your extension online now! 

What Information Do I Need to Include in My Extension Request?

When completing your extension request, be sure to provide accurate information. You will typically need to include:

• Your name

• Your Social Security number (or Employer Identification Number for businesses)

• Your address

• Estimate of your total tax liability

• The amount you’ve already paid (if any)

• The balance due

• The amount you’re paying with the extension

How Do I File a Joint Tax Extension?

If you plan on filing a joint tax return, it’s best to file for a tax extension jointly as well. Filing for a joint extension is similar to filing an individual extension; only you need to complete the form with information for both you and your spouse.

The main additional information you’ll need when filing a joint tax extension includes:

• Your spouse’s social security number

• What the total tax liability and payments should be for both you and your spouse

It’s important to note that whoever’s name is listed first when filing your tax extension should also be listed first when you go to submit your tax return.

What Are Some Common Mistakes to Avoid When Filing for an Extension?

When filing for a tax extension, be sure to avoid the following common mistakes:

• Missing the original deadline for filing the extension request.

• Underestimating your tax liability when making payments.

• Providing inaccurate or incomplete information on the extension form.

• Failing to pay at least a portion of the taxes owed by the original deadline.

The best way to avoid mistakes when filing for an extension is by filing an extension online. This ensures your extension is filled out accurately and takes the pain out of submitting an extension via mail.

How Do I Know If My Extension Request Has Been Approved?

If you e-file your extension request, you should receive an electronic confirmation that your request was received and approved. If you mail a paper form, it’s a good practice to send it via certified mail or with tracking to have proof of submission.

Does the IRS Deny Tax Extensions?

The IRS does reject tax extensions occasionally. The most common reasons a tax extension is rejected includes:

• Form entry errors like a misspelling, switched numbers, or other typical typos.

• Inaccurate information like using an old last name or an old address.

Receiving a tax extension rejection from the IRS is relatively rare. If your extension request is rejected, you’ll receive an e-mail or letter informing you of the issues. In most cases, the IRS gives you five days to update the extension request and resubmit.

The best way to ensure that your extension is approved is by using an e-filing service that helps check your forms for errors before submitting them to the IRS.

Frequently Asked Questions About Paying Taxes When Submitting an Extension

Submitting a tax extension can be confusing because it offers you extra time to file your tax return, but does it also give you time to pay your taxes? 

In this section, we look at questions surrounding paying your taxes when requesting a tax extension. 

Do I Need to Pay My Taxes When Filing for an Extension?

Yes, you are still required to estimate and pay any taxes you owe by the original tax filing deadline. Failing to do so may result in penalties and interest charges, even if you file for an extension. The extension only pertains to the filing deadline, not the payment deadline.

How Do I Estimate Tax Liability for My Extension?

Unfortunately, you aren’t able to submit a tax extension without having a good estimate of your tax liability for that given year. 

The easiest way to estimate your taxes is by using your previous year’s tax return. If your income hasn’t changed significantly and you haven’t had any major life changes (i.e., marriage, purchasing property, etc.), then you can generally use your previous year’s tax payment for your current year's estimate. 

However, if your tax situation has changed, then you’ll need to estimate your taxes using the following steps:

• Determine Your Filing Status – Decide whether you’ll be filing as single, married filing jointly, or some other status. 

• Calculate Your Gross Income – This is the total of all of your income in a given year before taxes, credits, or deductions.

• Calculate Adjusted Gross Income (AGI) – Deduct any allowable ‘above line’ adjustments to your gross income, like student loan interest payments, retirement account contributions, HSA contributions, or alimony to get your AGI.

• Determine Your Deductions – Calculate all your itemized deductions and then determine if it’s better to use the standard deduction or itemize your deductions.

• Claim Exemptions – If you have any dependents, make sure to claim them as a personal exemption.

• Calculate Your Effective Tax Rate – Use your AGI minus your deductions and exemptions to determine your tax rate (the tax bracket you’re in based on your taxable income). Note that your effective tax rate is different from your marginal tax rate, which is the percentage of tax you pay on the last dollar of your taxable income. 

• Apply Any Tax Credits – Tax credits directly reduce your taxes owed. Therefore, any credits are subtracted from your total tax liability.

Your calculated taxes owed minus any applicable tax credits is the amount you should enter on line 4 of Form 4868, ‘estimate of total tax liability.’

How Do I Calculate Taxes Owed on My Tax Extension?

As long as you have been able to estimate your total tax liability, calculating your taxes owed should be relatively simple. All you need to do is subtract any tax payments (estimated payments and taxes taken directly from a paycheck) from your estimated tax liability. 

The difference between your estimated tax liability and total payments is the balance due. You must pay at least 90% of your owed taxes by the tax deadline to avoid late payment penalties.

What If I Overestimate My Taxes When Requesting an Extension?

If you overestimate your taxes when filing for an extension and later find that you overpaid, you’ll receive a refund for the excess amount when you file your return. It’s generally better to overestimate than to underestimate, as underestimating can lead to penalties and interest.

What is the Safe Harbor Rule?

As you may have noticed, calculating the taxes that you owe can be difficult. If you’re requesting a tax extension, chances are that you haven’t had the opportunity or don’t have the necessary forms to accurately calculate how much you owe in taxes. 

In instances where you may not have an accurate estimate of how much you owe, you can use the safe harbor rule to your advantage. Thanks to the safe harbor rule, the IRS will not charge you an underpayment penalty if:

• You pay at least 90% of the taxes you owe in the current year

• You pay at least 100% of the taxes owed for the previous tax year

• You owe less than $1,000 in taxes

Note that if your AGI is over $150,000 filing jointly or over $75,000 if married filing separately, you must pay whichever is lower: 90% of the current tax year owed or 110% of the taxes owed on the previous year’s return.

What is the Late Payment Penalty?

If you don’t pay your taxes by the filing deadline, the IRS will charge you a late payment penalty. The penalty is 0.5% of the money you owe per month, and it maxes out at 25% of the tax that remains unpaid.

In addition to the late payment penalty, the IRS continues to collect interest on tax debt and penalties while the taxes remain unpaid. 

What If I Can’t Pay My Taxes When Filing an Extension?

If you can’t afford to pay your taxes when filing for an extension, there are several options to help deter the IRS from sending you to collections. Some of the options include:

• Installment Agreement – you pay the IRS in predetermined installments over a set period of time.

• Offer in Compromise – Negotiate with the IRS to reduce your payment to something that you actually can afford to pay.

• Currently Not Collectible Status – If you’ve fallen on hard times and can truly not pay your taxes, the IRS will put you in a currently not collectible (CNC) status. This delays collection attempts, but you’ll still have to pay your taxes later.

Check out our post on handling taxes when you can’t pay by the deadline to explore all of your options in detail.

Other Common Questions About Filing a Tax Extension

Last but not least, we’ll cover other commonly asked questions about filing a tax extension.

In this section, we cover everything from changing your filing status after filing for an extension to the reasons for filing an extension, even if you don’t owe taxes. 

Will Filing for an Extension Trigger an Audit?

No, filing for an extension does not increase your chances of being audited. Audits are typically initiated for specific reasons, such as discrepancies in your tax return, rather than the act of requesting an extension.

Do Tax Extensions Apply to State Taxes?

Tax extensions granted by the IRS pertain only to federal income taxes. If you have state income tax obligations, you’ll need to check your state’s specific rules and requirements for obtaining an extension. Many states offer extensions that align with the federal extension period, but it’s essential to confirm with your state’s tax agency.

Is There a Penalty for Filing an Extension?

Filing for an extension itself does not incur a penalty. However, if you don’t pay the taxes you owe by the original filing deadline, the IRS may impose penalties and interest on the unpaid balance.

Make sure to read about the implications of filing a tax extension to understand the advantages and disadvantages of filing a tax extension.

What is the Failure-to-File Penalty?

If you owe money to the IRS and don’t file an extension or your tax return by the filing deadline, you will be assessed a late penalty. The penalty is 5% of the taxes owed to the IRS, with a limit of 25% of the total taxes owed. 

The late filing penalty can add up extremely quickly, depending on how much you owe in taxes. Filing for an extension is the easiest way to avoid the late-filing penalty if you cannot file your tax return on time.

Can I File for an Extension if I’ve Already Filed My Tax Return?

No, you cannot file for an extension after you’ve already filed your tax return. Extensions are for those who need more time to prepare their return before the original deadline.

If you need to revise a tax return that you’ve already submitted, then you should complete Form 1040-X. 

Can I Change My Filing Status After Filing an Extension?

Yes, according to the instructions on page 2 of Form 4868, you are able to change from filing a joint return to filing separately or vice versa after filing an extension.

If you filed separate extensions and wish to file your taxes jointly, then you would just need to enter the amount of taxes that you paid collectively on your tax return when you submitted your extension. 

If you filed a joint tax extension and instead opt to file separately, you can separate the total amount paid when submitting your extension however you deem appropriate when filing your individual tax returns. The combined total should still equal the original value entered on your extension.

It’s important to note that changing your filing status will probably impact how much you owe in taxes. Therefore, it’s important to consider the implications of each filing status before making the change. 

Should I Request an Extension If I Don’t Owe Money?

You don’t necessarily need to request a tax extension if you don’t owe taxes. However, it may be a good idea for the following reasons:

• If you plan on submitting your taxes after the deadline and unexpectedly determine that you owe money, then you will have to pay the late-filing and late-payment penalties.

• Taxpayers have three years from the due date of filing their taxes to collect a tax refund. If you file an extension, you get three years from the extension deadline instead of the original filing deadline.

Requesting a tax extension if you don’t owe money essentially acts as a safeguard against potential penalties and may give you the extra time you need to collect a tax refund.

Can I File a Tax Extension for My Business?

Tax extensions aren’t just for personal taxes; they can also be used for your business tax return. Depending on the type of business that you own, the extension may be included as part of your personal tax extension, or you may need to file Form 7004. 

To learn about the different types of tax extensions for businesses and how to file an extension for your business, check out our article on filing a tax extension for an LLC. 

Wrap-Up

Filing a tax extension can provide much-needed relief if you’re unable to meet the original tax filing deadline. It’s crucial to understand the process, meet the requirements, and ensure you pay your taxes on time. 

This FAQ guide aims to address common questions about tax extensions, helping you navigate the extension process with confidence and making the tax season a little less stressful. Remember that while an extension gives you more time to file your return, it does not delay the requirement to pay any taxes you owe by the original due date.