Income Tax Extension Questions and Answers

I want to clear up some confusion and misconceptions that go along with filing a tax extension. This information applies to individuals, sole proprietors, single member LLCs, and side hustle business owners.

The reality is, when someone hears that their tax professional insists on filing an extension, for whatever reason. Maybe the return is complicated, maybe they have too much work on their plate, or maybe it’s too close to the filing deadline and they need more time. When someone hears that their tax pro is filing an extension, the person invariably freaks out. They want their return filed by the filing deadline because they don’t want to owe any penalties and interest.

It’s a valid point, but allow me to clear the air, and clarify some misconceptions. If you stay until the end, I’ll share a shortcut on how to get through to an IRS operator in the shortest time possible.

Filing an tax extension allows you to request more time to file your tax return beyond the normal deadline. The deadline for individuals to file their tax returns is generally April 15th. If you or your tax preparer are unable to complete your tax return by this date, you can file a tax extension by submitting Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. This form can be filed electronically or mailed to the Internal Revenue Service.

Now, when you file a tax extension, keep in mind that it doesn’t give you more time to pay any taxes that you owe. If you expect to owe taxes and you’re unable to pay them by the April 15th deadline, you should estimate the amount that you owe and pay it by the deadline to avoid late payment penalties and interest.

It’s important to note that a tax extension only extends the time for you to file your tax return, not the time to pay any taxes due. If you don’t pay the taxes that you owe by the April 15th deadline, you may be subject to late payment penalties and interest.

If you owe taxes and are unable to pay them by the April 15th deadline, you should pay as much as you can by the deadline to minimize late payment penalties and interest.

Conversely, if you’re due a refund and don’t file an extension. You have nothing to worry about. This is because you’re due a refund. And you won’t be subject to penalties and interest. Do you get how that works? If you don’t file a tax return and you’re due a refund, then the IRS can basically keep your money until you file your return. Although, you should file your return within three years to claim your refund or else the IRS keeps it and it’s lost forever.

Also, understand that a tax extension is not automatic and you must file Form 4868 by the April 15th deadline to request an extension. If you don’t file a tax extension or do not file your tax return by the April 15th deadline, you may be subject to late filing penalties.

When you file a tax extension, you’re requesting additional time to file your tax return beyond the normal April 15th filing deadline. You can file a tax extension for a variety of reasons, such as if you need more time to gather all of the necessary documents and information, or if you are unable to complete your tax return by the deadline for whatever reason.

To recap, a tax extension only gives you more time to file your tax return, not more time to pay any taxes that you might owe.

Here are a few more things to keep in mind when it comes to filing a tax extension:

Filing a tax extension does not exempt you from paying any taxes that you owe. If you expect to owe taxes and are unable to pay them by the April 15th deadline, you should pay as much as you can by the deadline to minimize late payment penalties and interest.

If you file a tax extension and later determine that you don’t have a filing requirement, you don’t need to file a tax return. However, if you’re entitled to a refund, you will need to file a tax return in order to claim it.

A tax extension gives you an additional six months to file your tax return. This means that if you file a tax extension, your new deadline for filing your tax return will be October 15th. If you miss that date, there isn’t a second extension available.

I hope this information helps. Thanks for reading, and see you in the next blog post!