Tax season can be a stressful time, and for some taxpayers, meeting the April 15th deadline can be challenging. Fortunately, the IRS allows taxpayers to file for an extension, giving them extra time to complete their tax returns. However, it’s important to understand what an extension does—and what it doesn’t do—before deciding if it’s the right choice for you.
What a Tax Extension Does (and Doesn’t Do)
Filing a tax extension grants you additional time—until October 15th—to file your tax return. This can be helpful if you need more time to gather necessary documents or ensure your return is accurate. However, it does not extend the deadline for paying any taxes you owe. If you typically owe taxes, you must estimate your liability and submit a payment by April 15th to avoid penalties and interest.
Reasons to File an Extension
There are several common situations in which filing a tax extension makes sense:
- Missing Information – If you haven’t received all your tax documents, such as a Schedule K-1 or Form 1099, waiting until you have accurate information can prevent mistakes on your return.
- Major Life Events – Significant life changes—such as the death of a loved one, marriage, divorce, or a major move—can make it difficult to focus on tax preparation. An extension provides extra time to navigate these transitions.
- Travel Conflicts – If you’re out of town during tax season and unable to access necessary paperwork or meet with your tax preparer, an extension can help ensure your return is filed correctly.
- Complex Tax Situations – Business owners, investors, and individuals with multiple sources of income may need extra time to calculate deductions, credits, and tax liabilities accurately.
- Late Tax Preparation – If you’ve waited too long to start your taxes or your tax professional is overwhelmed with other clients, an extension can help avoid rushed mistakes, rush charges, and ensure a properly completed return.
How to File an Extension
To request an extension, you must submit Form 4868 to the IRS electronically or on paper by April 15th. Many tax software programs allow you to file an extension online, and tax professionals can assist as well.
Potential Drawbacks of Filing an Extension
While extensions provide additional time to file, they are not always the best option. Consider the following before requesting one:
- Interest and Penalties – If you owe taxes and don’t pay by April 15th, interest will accrue on the unpaid balance, and penalties may apply.
- Delayed Refunds – If you’re expecting a tax refund, waiting to file means waiting longer to receive your money.
- Risk of Procrastination – An extension gives you more time, but it doesn’t eliminate the need to file. Some taxpayers may delay unnecessarily, creating last-minute stress in October.
Filing an extension can be a useful tool if you need more time to accurately complete your tax return. However, it’s important to remember that an extension does not extend the time to pay any taxes owed. If you anticipate owing taxes, submitting a payment by April 15th can help avoid costly penalties and interest. When used wisely, an extension can help ensure a more accurate return while reducing stress during tax season.
For ease of tax preparation or to file an extension, contact Saunders Tax & Accounting at www.SaundersTax.com or call us at 301-714-2071. Open Monday – Friday 9 am to 9 pm and Saturdays 9 am to 3 pm. Awarded the Hagerstown Chamber of Commerce “2023 Small Business of the Year” and Hagerstown Hotlist 2024, we have been providing a Less Taxing Life and More Prosperous Solutions since 1984!
