How To File for a Tax Extension
Filing an extension is probably one of the easiest tax chores you might ever face. That said, why would you want to? And what does it do for you?
What an Extension Is and What It Does
When you file an extension, you re asking the Internal Revenue Service to give you some extra time to file your tax return. The deadline to file your 2016 personal tax return is April 18, 2017. But maybe you ve been busy and you forgot about the deadline looming, or maybe you need to lay your hands on certain documents so you can prepare your return.
You know you may not have them by April 18 — or at least you don t want to risk not having them at crunch time.
It s not a problem. File Form 4868 instead of your tax return before the deadline. The extension is automatic. When the IRS receives your form, that s the end of it, or at least the end of the extension process. You ll still have to file your tax return, but you now have six more months to do it until October 16, 2017. You have an additional day from the traditional deadline because Oct. 15 falls on a Sunday.
If You Owe the IRS Money
Unfortunately, your payment is still due by the original April 18 deadline if you owe the IRS taxes. Filing an extension doesn t give you additional time to pay your tax liability, and the IRS charges interest and sometimes penalties on tax payments made after the April deadline.
It s usually a good idea to go ahead and prepare your tax return in April, even if you don t file it yet.
This will give you a rough idea of what you owe — if you owe. Then you can send payment for that amount when you submit your extension. If your payment turns out to be too much, the IRS will issue you a refund. If it s not enough, at least you ve cut your penalties and interest to just the portion of the tax debt that was short.
- Create a rough draft of your tax return so you have an idea as to whether whether you can expect a refund or you owe the IRS.
- Download Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return and fill it out. If you owe tax, write a check for that amount.
- Mail the extension form with your check. Your extension must be postmarked on or before April 18. Here s a list of mailing addresses for sending Form 4868 to the IRS. Send the extension form by certified mail with return receipt requested so you have proof of the date you mailed it and when the IRS received the form.
- You can also file an extension online with the IRS. In fact, if you use IRS Direct Pay to make your payment and you mark it as an extension payment, the IRS will automatically give you an extension — there s no need to also submit Form 4868.
- If you can t afford to pay your taxes in full by the April deadline, pay as much as you can when you file your extension then pay the rest when you file your return by the October deadline. If you still cannot pay in full, you can set up an installment agreement with the IRS.
- It s possible to file an extension and pay federal taxes using a credit or debit card. There are several IRS-approved credit and debit card services which can be found on the IRS Web page: Paying Taxes by Credit or Debit Card. A word of warning, however — these are third-party services and they charge fees for processing tax payments. But if you pay at least $1 of the tax you think you owe using a debit or credit card, you won t have to file the extension form. Your payment acts as an automatic extension.