How to file a tax extension: Everything you need to know

How to file a tax extension: Everything you need to know

01.08.2024

Federal tax returns are due by April 15 each year, but you may find that you’re not quite ready to file by that date. Maybe you’re still waiting for an important tax form, or perhaps you simply haven’t had time to file. Either way, you’ll need to let the IRS know your tax return will be late.

The good news is the IRS allows you to file an extension on your federal tax return, giving you more time to complete and file it. However, an extension for your tax return doesn’t give you an extension for paying your tax bill, so make sure to plan accordingly.

What is a tax extension?

A tax extension pushes back the deadline by which you must file your tax return. In most cases, federal tax returns are due in April. But if you file for an extension, you won’t have to file your return until October. You can apply either online or via mail, and unless you hear otherwise, you can assume your request was approved.

Applying for an extension on your federal tax return is critical if you don’t think you’ll be able to file your return by the April due date. The penalty for failing to file your tax return is 5% of your unpaid taxes each month your return is late. Once your return is 60 days late, your fee will amount to $450 or 100% of your tax bill, whichever is less.

Important dates for tax extensions

If you’re considering applying for a tax extension, there are two important dates you should put in your calendar:

  • April 15: Federal tax returns are due April 15 of each year, unless that date falls on a holiday, Saturday, or Sunday. In 2023, the tax due date fell on April 18. In 2024, the deadline will be Monday, April 15. If you aren’t able to file tax returns by April 15, you must request an extension by this date. Additionally, even if you file for an extension, if you’ll owe taxes, you must pay them by April 15 (or whatever date taxes are due in the current year).
  • October 15: If you request an extension, your federal tax returns will be due October 15, unless that date falls on a holiday, Saturday, or Sunday. In 2024, the extended due date for federal tax returns is Tuesday, October 15.

How tax extensions work

A tax extension extends the date by which you must file your tax return by an additional six months. Someone could need an extension for many reasons. For example, maybe you are missing important documents you need before you can file. Or perhaps you’ve gone through a family emergency — or even just a particularly busy season — and haven’t had time to complete your return. An extension gives you a bit of breathing room.

However, this extension only applies to the tax return itself, not any taxes you owe. If you owe taxes to the IRS, you must still pay those by April 15 or be subject to a failure to pay penalty. Your penalty will amount to 0.5% of your unpaid tax bill each month your taxes go unpaid, with a maximum penalty of 25%. So, if you owe $1,500 in taxes, you could pay a penalty as high as $375, even if you’ve filed your tax return.1

If you haven’t completed your tax return yet, it stands to reason you may not know exactly how much you’ll owe. One option is to make an estimated tax payment of how much you think you’ll owe. If you overpay, you can get the excess back in the form of a refund.

In addition to the many reasons why someone may want to request a tax extension, there are also some situations where an extension is automatic.

Automatic extensions for overseas taxpayers

You’ll get an automatic two-month extension to both file your tax return and pay your income taxes if you’re a U.S. citizen or resident alien and live outside the U.S. and Puerto Rico at the time of the April 15 due date or are in military or naval service on duty outside the US. and Puerto Rico.2 Your due date to both file and pay your taxes will be June 15.

Overseas taxpayers also have the option to extend their deadline even further. However, rather than being eligible for an additional six months, overseas taxpayers can request an extension to the October deadline, which gives them an additional four months.

Automatic extensions due to natural disasters

Being involved in a natural disaster may affect your ability to file your tax return on time or even to file the paperwork needed to get an extension. For that reason, you’ll get an automatic extension to file your tax return and pay your tax bill if you’re located in a federally declared disaster area. This extension applies to both individuals and businesses and applies to normal tax returns, estimated tax payments, and payroll taxes.3

It’s important to note that the IRS sets an extended deadline for each disaster individually.4 If you’re located in a disaster area, you’ll have to check what your new tax deadline will be.

It’s quite common for an area to be declared a disaster zone and for an automatic extension to be granted. For example, 35 different declarations were made to extend tax deadlines or provide relief in a particular area. In 2023, declarations have been made across the country for incidents like Hurricane Idalia, wildfires in Hawaii, severe storms and flooding in several U.S. states, and more.

Military members and automatic extensions

If you’re a military member serving in a combat zone, you’ll get an automatic extension for both filing your tax return and paying any taxes you owe. The extension for combat zone service is 180 days after you leave a combat zone or after an area is no longer considered a combat zone.5

For example, if you leave a combat zone on June 1, you’ll have received an automatic extension for the time from April 15 through June 1 and won’t have to file your tax return or pay your taxes until 180 days after June 1.

If you’re a military member serving overseas but not in a combat zone, you qualify for the same automatic two-month extension available to other overseas taxpayers. Finally, if you’re a military member serving in the United States, your tax return and bill are due by April 15. You can file the six-month extension available to everyone for your tax return, but that won’t apply to your taxes due.

Steps to file a tax extension

If you’re considering requesting a tax extension, here are the steps you’ll need to follow:

Gather the required information

When you request a tax extension, you’ll do so using IRS Form 4868. It’s a relatively simple form with just a few fields to complete. However, completing some of these fields may require going through your records and even running some preliminary numbers to estimate how much you’ll owe in taxes.

You’ll need the following information for the form6:

  • Name and address
  • Social Security number (and your spouse’s, if applicable)
  • Estimate of total tax liability
  • Total tax payments for the year
  • Tax balance due
  • Amount of tax you’re paying

Choose your filing method

Once you’ve gathered all the information you’ll need, it’s time to choose your filing method and apply for your extension. There are three ways to get an extension for your tax return:

  1. Make an estimated tax payment for your taxes due and, at the time of your payment, indicate the payment is for an extension. You can make your payment via Direct Pay, the Electronic Federal Tax Payment System, or a credit or debit card.
  2. E-file form 4868 using tax software of your choice or with the help of a tax professional. This option should be available on all major tax software.
  3. File a paper version of Form 4868 by mailing it to the address listed on the form. If you owe taxes, be sure to include an estimated payment. If you choose this option, make sure to send it via certified mail and keep a copy for your records.

There’s no best way to file for your extension. Simply choose the method that works best for you. Most people may find it easiest to file electronically, either when they make a payment or by using e-file. However, there’s not one method that increases or decreases your chances of having your request approved.

Once you file Form 4868, you should plan not to get a response. If you don’t hear back from the IRS, you can assume your extension was approved. If it was denied for some reason, the IRS will contact you to let you know.

Avoiding penalties and interest charges

As we’ve mentioned, there are financial penalties both for not filing your tax return on time and not paying your taxes on time.

Failure to file penalty

If you don’t file your tax return on time, you’ll be subject to the following penalties: 7

  • 5% of your unpaid taxes each month your return is late, for a maximum late penalty of 25% of your unpaid taxes.
  • Once your return is more than 60 days late, $450 or 100% of your unpaid taxes, whichever is less

In addition to your penalty, you could also pay interest on your penalty. Interest starts accruing on the date your penalty is due and continues to accrue until it's fully paid.

Failure to pay penalty

If you don’t pay your tax bill on time, you’ll owe interest on the unpaid amount. Interest starts accruing on the date your tax bill is due and continues to accrue until it's fully paid. In addition to interest, you’ll also be subject to a Failure to Pay Penalty in the following amounts:8

  • 0.5% of your unpaid taxes each month, for a maximum late penalty of 25% of your unpaid taxes
  • 0.25% of your unpaid taxes each month if you filed your return on time and have an approved payment plan
  • 1% of your unpaid taxes each month if you don’t pay your tax within 10 days of getting a levy notice from the IRS

If you are subject to both a Failure to File Penalty and a Failure to Pay Penalty in the same month, the Failure to File Penalty is reduced by the amount of the Failure to Pay Penalty.

Estimated tax payment

Requesting a tax extension does not extend the date by which you must pay your income taxes. That bill is still due by April 15, even if you don’t plan to file your tax return until October.

However, if you haven’t filed your tax return by April 15, you may not know exactly how much you need to pay. The easiest way to figure out how much you’ll need to pay is to use the Estimated Tax Worksheet on Form 1040-ES or use an online tax software. You don’t have to complete your full return, but it’s worth it to at least get a rough estimate so you can avoid a Failure to Pay Penalty.

Refunds and tax extensions

If you don’t file an extension for your tax return and don’t pay your tax bill by April, you’ll get stuck with a penalty, both for failing to file your return and failing to pay your taxes. However, if you file late without having filed for an extension and are owed a refund, you won’t pay any penalties.

That doesn’t necessarily mean it’s worth waiting, however. If you’re owed a refund and file your taxes late, you’re simply delaying your refund. You won’t get your refund until you’ve actually filed your tax return and the IRS has had a chance to process it.

Even if you do expect to get a refund and are okay waiting to receive your refund until you’ve had a chance to file, it may still be worth filing for the extension. If you’ve made a mental miscalculation and end up owing money, filing the extension will help you avoid a Failure to File Penalty, even if you still have to pay the Failure to Pay Penalty.

Read More: How Long Does it Take to Get a Tax Refund?

Requesting an extension for state taxes

Depending on where you live, you may also need to request a tax extension for your state income taxes. Some states don’t require that you request an extension at all. For example, California residents are automatically granted an extension without having to file for it.9

In other states, your federal tax extension also qualifies you for a state tax extension. For example, Wisconsin offers a tax extension to anyone who has requested a federal extension as long as they attach a copy of Form 4868 to their state tax return when they file it.10

Finally, some states may have their own tax extension form that taxpayers must complete and file at the state level to qualify for an extension.

It’s worth noting that in all of these cases, just like with your federal taxes, you must pay your state income taxes by the April 15 due date, even if you’ve had an extension approved to file.

Staying informed

It’s important to stay updated on tax regulations and deadlines to ensure you file your taxes properly and on time and that you pay the correct amount. In most cases, you’ll have all the updated information if you use tax filing software or hire a tax professional. The IRS also has many publications on its website where you can learn more about specific tax subjects and get updates on the latest tax news.

If you have a complex tax situation and it’s especially important for you to stay in the know, consider hiring a tax professional. They can be your eyes and ears in the tax industry to save you the time of doing research yourself.

The bottom line

Most of us have some mixed feelings about tax day. On one hand, tax season can be an exciting time for people who are receiving refunds (but is obviously less so for those who owe the IRS money).

However, for someone going through a challenging time or still waiting on important tax documents, tax season can be stressful as you wonder whether you’ll be able to file your taxes on time.

If April 15 — or whatever tax day is for the current year — rolls around and you haven’t had a chance to file your tax return yet, make sure to file an extension with the IRS. Your extension will most likely be automatically granted, so you have until October to file. However, if you owe taxes, make sure to pay those by April or risk getting stuck with interest and penalties.

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RO3301569-1223

  1. IRS. “Failure to pay penalty.” December 2023.
  2. IRS. “U.S. Citizens and Resident Aliens Abroad - Automatic 2 Month Extension of Time to File.” May 2023.
  3. USAGov. “Tax relief for federally declared disaster areas.” December 2023.
  4. IRS. “Tax relief in disaster situations.” December 2023.
  5. IRS. “Extension of Deadlines — Combat Zone Service.” May 2023.
  6. IRS. “About Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return.” April 2023.
  7. IRS. “Failure to pay penalty.” December 2023.
  8. IRS. “Failure to pay penalty.” December 2023.
  9. State of California Franchise Tax Board. “Extension to file.” November 2023.
  10. State of Wisconsin Department of Revenue. “Tax Filing Extensions For Paper and Electronically Submitted Returns.” December 2022.

The Currency editors

Staff contributors

The CurrencyTM, a publication from Empower, covers the latest financial news and views shaping how we live, work, and play. We keep you current on ways to plan, save, and invest for life.

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