How to Extend Your Tax Return

As the income tax deadline approaches, many taxpayers struggle to compile all the documents and information needed to file their federal income tax returns before April 15th. Whether your tax situation is complicated this year by transactions, life events, or missing tax documents such as W-2s or 1099s, the IRS provides at least one avenue of relief: an extension of time to file. It’s a relatively quick and easy process to extend your tax return, but there are some important details and distinctions to understand.

How to Extend your Tax Return

How to Extend your Tax Return

To extend the due date of your federal income tax return by six months, file Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return with the IRS. You can file this electronically or by mail. As the name suggests, this form automatically grants taxpayers an extension of time to file without waiting for the IRS’s approval.

The extension is due by the original due date of your federal income tax return. Consider an extension filed on time if you properly address, postmark, and deposit it in the mail by April 15th or the applicable due date.

An extension of time to file is not an extension of time to pay. The IRS may grant an extension of time to pay in certain situations, such as undue hardship or for taxpayers residing outside the U.S., but these exceptions are fairly limited. Therefore, you must generally estimate and pay your tax liability with your extension by the original deadline. Failure to do so may result in penalties and interest on the taxes owed.

The penalties for failure to timely file your tax return are often higher than the penalties for failure to timely pay your taxes. Therefore, if you need more time, it is always a good idea to extend your tax return even if you cannot make the full payment by the original due date.

State Tax Extensions

Most states that assess personal income taxes share the same due date as the federal return. Thus, you will also need to extend your state income tax return. Some states grant an automatic extension of time to file your state tax return when you file the federal extension form with the IRS. However, others require filing the federal extension with the state itself. Others still have a separate extension form you must file with the state. It is important to carefully review your specific state’s requirements to extend your state tax return properly.

Similar to the IRS, most states only provide an extension of time to file, not to pay income taxes owed. If you expect to owe state taxes, you must either file a state-specific extension form by the original due date to make that payment or pay online via your state’s Department of Revenue website.

Filing an extension can provide relief for many taxpayers who find themselves in a stressful or complex tax situation. It is important to remember to file your tax return by the extended deadline, which is generally October 15th. If you need assistance filing an extension, contact us today for more information from our expert team.

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