When life gets in the way of filing your tax return by the April deadline, one thing can get you some relief: a tax extension. You can get a tax extension by filling out IRS Form 4868 and mailing it in, or you can do it online. Here are some do’s and don’ts.
Find the stamps
There’s nothing wrong with doing things the old-fashioned way and sending in the form by snail mail (it’s less than a page long), but just get proof that you mailed it, says Lee Reams Sr., an enrolled agent in Newport Beach, California.
“Lots of times the IRS will come back and say, ‘We never got it,’” he warns.
Use your tax software to get a tax extension …
If you don’t want to fill out the paper Form 4868 for your extension, see if your tax software supports Form 4868. Most do. You can simply follow the program’s instructions and see how to file a tax extension online that way.
… or head to the IRS’s Free File site
If you don’t plan to use tax software or haven’t decided which software to use, consider the IRS’ Free File website. The IRS partners with a nonprofit organization called the Free File Alliance to provide people who make less than $66,000 of adjusted gross income access to free tax-prep software from 12 software companies. Anybody — even people above the income threshold — can go there to file an extension online.
Note that the Free File site may not offer extensions all year, and that’s probably for good reason: You should request an extension on or before the April deadline to avoid a late-filing penalty from the IRS.
Remember to still pay your taxes by the April deadline …
Getting an extension does not give you more time to pay — it only gives you more time to file your return. So even if you can’t file your return by the April deadline, you need to estimate your tax bill and pay as much of that as possible at that time, Reams says. Anything you owe after the deadline is subject to interest and a late-payment penalty — even if you get an extension. You might be able to catch a break on the late-payment penalty if you’ve paid at least 90% of your actual tax liability by the April deadline and you pay the rest with your return. The IRS also might let you off the hook if you can show “reasonable cause” for why you didn’t pay on time, though you’ll need to attach a written explanation to your return.
… and to file your return by the October deadline
Requesting an extension and making an estimated payment in April are just half the work. You still have to file your final return.
“The real problem comes if you don’t file your return by October 15th. That’s when the penalties go off the chart,” says Mark Kohler, a CPA and tax advisor for the tax-software company TaxSlayer. “Keep in mind there’s still a deadline, and not to continue to procrastinate.”
Don’t be embarrassed or worried
Many people think getting an extension means you’re a terrible person or will get on the IRS’s bad side. That’s bunk, Kohler says.
“There’s this urban legend that all of a sudden you’re going to get audited. Actually, it’s the other way around. The IRS is assigning their audit teams and their computer system analysis to all the people that have already filed. When you file an extension, you’re actually staying out of the IRS’s radar for even longer, which is OK,” he says.
A note about overseas taxpayers and military members
Some folks don’t necessarily need to worry about filing the tax extension form at all. If you’re a U.S. citizen or resident who lived and worked outside of the country on the April deadline, you may automatically get two extra months to file your return and pay any amount due without having to request a tax extension. People affected by certain natural disasters may automatically get more time, too (the time varies; check the list of qualifying disasters). And some members of the military also get extra time automatically, depending on where they are and what they’re doing.