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By Caitlin White / Oct 14, 2014

How To File a Federal Tax Extension


Money Magazine reports that as of the end of September, more than a quarter of the nearly 13 million taxpayers who had filed for an extension have not yet filed, according to the IRS.1

Those numbers suggest that April 15th can be a hard cutoff for some taxpayers to hit. Next year, if you don’t have all of your paperwork ready, don’t panic. Instead, consider filing a tax extension. A tax extension will give you six more months to file taxes, moving the deadline forward from April 15th to October 15th.

How you can file a tax extension

Any U.S. citizen can file a tax extension. If you are unable to file your taxes on time, file for a tax extension before April 15th.

  1. Electronically: File Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return, online by accessing IRS e-file or using an outside tax provider like TurboTax.
  2. Mail: Estimate the amount of your refund, or the amount you might owe. If you will owe tax, make a payment for the approximate amount by April 15th. You can pay by mail or online, using the IRS’s Electronic Federal Tax Payment.

Potential penalties to keep in mind

A tax extension only provides additional time to file, and your income tax payment will still be due by April 15th. If you are late making this payment, you will have to pay penalties and interest. The failure to pay taxes on time penalty is 0.5% of taxes owed a month, plus interest.

However, the penalty for not filing on time is a lot larger. If you do not file your taxes by April 15th, you will have to pay 5% per month up to a maximum penalty of 25% of the balance due. Therefore, it is very important to file for a tax extension with plenty of time to spare.

Create a plan

If you are going to file for a tax extension because you cannot pay your taxes on time and are ready to pay the penalty, establish a payment strategy to keep yourself on track. For example, if you think you are going to owe $1,000, create a month-to-month plan of how you are going to come up with that money and budget accordingly.

If you are still having trouble coming up with the money owed, do your research. You may qualify for tax relief.

Get professional advice

Still unsure about how to file a tax extension? When it comes to the IRS, it’s always better to be safe than sorry. Consider talking to a tax professional to help you understand any potential fees, or visit www.irs.gov to learn more about tax extensions.

1Ellen Stark, 5 Things to Know If You Still Haven’t Finished Last Year’s Taxes, Money, October 9, 2014.