April 15th is Tax Day in the United States. While many expecting refunds may opt for early filing, those who owe the IRS may put off filing for as long as possible. If you have found that time has gotten away from you and you need more time to prepare paperwork or gather documentation, requesting a tax extension will give you much-needed breathing room.
What is a Tax Extension?
Many people may hear the phrase tax extension and immediately think that you can extend the time to pay the IRS, but this is NOT the case. A tax extension merely extends the filing date by six months. Moving the filing deadline from April 15th to October 15th.
You will still need to PAY your taxes owed by April 15th.
If you don’t know how much you owe the IRS, it may be useful to estimate. However, you will still pay penalties and interest on the balance due, if your estimate ends up lower than the actual amount owed.
The Purpose of a Tax Extension
You may be wondering what the purpose of a tax extension is, if you still have to pay by April 15th. While a tax extension doesn’t grant more time to pay any taxes owed, the extra filing time may be beneficial for those with more complicated tax returns. Tax returns may often include multiple forms and schedules. Gathering all the necessary documentation, especially for business owners, can be time-consuming. An extension on the filing deadline gives you extra time to ensure your return is complete and accurate.
How to File for a Tax Extension
You can file for a tax extension using the following methods:
- On the IRS website: You can request a tax extension directly on the IRS website while making your estimated tax payment, or by using the IRS Free File to request an extension.
- Through Your Tax Preparer: Several online tax preparation providers allow you to request an extension using their app.
- Form 4868: You can file a paper extension by mailing Form 4868 to the IRS. However, you’ll still need to mail this form by the April 15th deadline.
The Bottom Line
Filing and paying your taxes by the April 15th deadline is the best way to avoid penalties and interest. However, if you do need more time to prepare your return, a tax extension may be just what you need.
Remember, a tax extension does NOT grant you more time to pay. Your taxes are still due by April 15th.
