How to File a Tax Extension

If you're like most people, you dread tax season. But what's even worse than dealing with your taxes is having to pay the penalty for not filing them on time. The good news is that if you need more time to file your taxes, you can ask for a tax extension from the IRS.

It’s a common request. In fact, the IRS received about 19 million extension applications for the 2021 tax year.  

A tax extension gets you more time to submit your tax return. Instead of having to complete your taxes by April 15, you have until October 15. If you’re waiting on information or missed your accountant’s deadline to turn in your paperwork, a tax extension will grant you the additional time you need to get your taxes in order. 

If you want to learn how to file a tax extension, read on for more information.

Who should consider a tax extension? 

The deadline to file your tax return is usually April 15. But if you request a tax extension, you can have until October 15 to submit your tax return. 

If either deadline falls on a Saturday, Sunday, or legal holiday, the due date is delayed until the next business day. For example, April 15, 2022, was a Friday and the observed date of Emancipation Day, so the tax deadline was pushed to April 18, 2022. Taxpayers that requested an extension in 2022 had until October 17, 2022, to file their taxes, because October 15 fell on a Saturday. 

Having an additional six months to file your tax return can sound appealing, but there are some drawbacks that you should consider before requesting an extension. 

• You still have to pay your taxes by April 15: The biggest downside to filing for a tax extension is that it doesn't give you more time to pay your taxes. A tax extension only allows you to submit your federal tax return later. So if you owe money to the IRS, you'll need to make sure that you pay by the April 15 deadline, or you'll be subject to interest and penalties. 

• A tax extension can delay your refund: If you’re owed a tax refund, you won’t be able to claim it until you submit your tax return. If you’re counting on that money, a delay can be a hardship. 

Extension requests can make sense in the following situations: 

• You’re waiting on tax documents: If you lost your tax forms, such as a W-2, and are waiting for a replacement form, you may want to delay submitting your return until you have all the necessary information. 

• You experienced a major life event: Whether there was a death in the family or you moved to another state and can’t find your tax file, you may need additional time to get your taxes together. 

• Your accountant is booked: Many accountants are booked solid in the weeks leading up to tax time. If your favorite accountant’s tax preparation calendar is full, they may not be able to fit you in until after April 15. Requesting an extension allows you more time so that your accountant can complete your taxes after the major tax season rush. 

Are there any penalties to be aware of?

Asking for a tax extension from the IRS is free, and there is no penalty for doing so. However, you still have to pay the taxes you owe by April 15. Otherwise, the IRS will charge you a penalty and interest. 

How to file a tax extension in 5 steps 

Filing a tax extension is relatively simple and can be done in a few steps. Here’s how to do it: 

1. Request an extension by April 15 to avoid penalties

To avoid unnecessary penalties, be sure you submit your extension request by April 15. Otherwise, you could be subject to late filing penalties as well as late payment penalties. The late filing penalty is usually 5% of the amount due for each month or part of the month your return is late, up to a maximum of 25%. If your return is more than 60 days late, the minimum penalty is $435 or the balance of the tax due on your return, whichever is smaller. 

2. Estimate how much you owe

The IRS will only grant you an extension if you estimate your tax liability. If you usually owe, but leave the tax liability section blank, the IRS may deny your request. 

You can use the IRS’ Tax Withholding Calculator to estimate how much you have to pay in federal taxes. 

3. Request an extension 

There are three ways to request an extension: 

• Pay taxes due: You don’t have to fill out forms if you make a payment of the amount you owe using the IRS’ electronic payment options. When you pay your estimated income tax bill, the IRS will automatically process an extension of your tax filing deadline. For more information or to submit a payment, visit www.IRS.gov/Payments.

• Submit Form 4868 online: Taxpayers can request an extension online with Free File or with other tax software platforms. All taxpayers can use Free File to file an extension request, regardless of their income. 

• File a paper Form 4868: If you’d prefer to submit a paper request, you can print out Form 4868 and mail it to the designated address for your state that’s listed on the form. 

It takes just a few minutes to request an extension, and there’s no cost associated with these requests. 

4. Make sure your extension wasn’t denied

In most cases, the extension request will go through without any hiccup. In fact, the IRS will only notify you if your request is denied. 

Common reasons for extension rejections include: 

• There may be a typo with your birth date or Social Security number

• The address you provided doesn’t match the information the IRS has on file

• You didn’t calculate your tax liability

If your request is rejected, the IRS will notify you and give you a window of time — typically five days — to correct the issues and resubmit your request. 

5. File a state tax extension if necessary

Depending on where you live, you may need to file a request for your state income taxes as well as your federal income taxes. As with federal income taxes, you still owe the taxes due by the original tax filing deadline. 

In some states, extensions are automatic, with no need to submit any request. In others, the request must be submitted before the tax filing deadline. If your state requires a request, you’ll have to fill out a state-specific form and submit it by the deadline. You can find out what your state taxing requirements are by checking with your state tax agency. 

Exceptions

There are some special exceptions that may give you more time to file your tax return without submitting an extension request: 

U.S. citizens and resident aliens living abroad

If you are a citizen of the United States or a resident alien and reside outside of the country, you are eligible for an automatic two-month extension to file your tax return without requesting an extension. For those living abroad, the deadline is June 15. However, you still must pay any taxes due by April 15 to avoid penalties and interest. 

Combat zone service

If you’re in the military and serving in a combat zone, you may be eligible for a combat zone extension. This extension postpones the deadlines for most tax actions for the period of your service in a combat zone, plus 180 days after the last day of your service in the combat zone. 

Disaster victims 

If your area was affected by a natural disaster, such as a hurricane or tornado, you may be eligible for a tax extension. In past tax years, the IRS — in collaboration with the Federal Emergency Management Agency (FEMA) — has extended deadlines for those impacted by major disasters. For example, Hurricane Ida made landfall in 2021. To help taxpayers living in the states damaged by the storm, the IRS extended its tax deadlines to January 3, 2022. Visit the IRS’ tax relief in disaster situations page to find out if you’re eligible for an extension. 

Acorns is not engaged in rendering any tax, legal, or accounting advice. Please consult with a qualified professional for this type of advice.