How to File for a Tax Extension in 2023
March 01, 2023
When life gets busier and more demanding, filing for a tax extension becomes inevitable. Some of you are juggling work and studies, fulfilling your parenting duties, or dealing with major changes in your life.
Other times, you may just be too preoccupied to always deal with taxes.
On the other hand, we must still strive to fulfill our tax obligations despite any lapses and challenges we may encounter to avoid incurring penalties and additional liabilities.
This article will give you all the key pointers you need to file an extension to finalize your tax documents and responsibilities.
Without further ado, let’s jump straight into it!
Key Takeaways
- Tax extension is the extended time granted by the IRS to taxpayers who are unable to file their taxes on or before the set deadline.
- Tax filing extensions do not grant extension on tax payment due dates.
- You may file your tax extension online or through snail mail. You can also contact the IRS through their toll-free number, 800-829-3676.
- Tax extension requests are generally approved instantly, provided that there are no discrepancies or errors in the information declared on the taxpayer’s forms.
- Late payment and late filing penalties are charged on taxpayers who fail to file their Form 4868 or pay their taxes due in full and on time.
What is a Tax Extension?
Tax extension refers to the additional time given to taxpayers to finalize all the paperwork needed for their tax return. The deadline for filing tax returns for the 2023 tax year is April 15, 2024.
If you file for an extension, you have until October 15, 2024, to ensure all your tax documents, deductions, and refunds are correctly claimed and finalized.
Tax extensions are granted by the IRS, provided that taxpayers file their Form 4868. At most, you get a six-month filing extension once the IRS adheres to your request.
Tax payment deadlines are different from tax return deadlines.
Getting a tax extension should not be mistaken for additional time to fulfill your tax payments.
When to File for a Tax Extension?
There are different reasons why you may need to file for a tax extension. The following are the most common and valid reasons acknowledged by the IRS:
#1. When You’re Missing Required Documents
The documents needed to file your taxes are:
- Income statements (W-2 and MISC-1099)
- Social Security forms
- Tax deduction receipts
- Self-employment tax forms
- Proofs of expenses
If you happen to misplace any of the documents enumerated above or do not have a physical copy of the required documents, you may be eligible for a tax extension. In the meantime, secure all the missing key documents before the deadline.
#2. When Unforeseen Life Events Take Place
At times, you may already have the complete documents but cannot file your taxes on time. This may be due to unexpected events taking place in your life.
Entering parenthood, dealing with a loved one’s death, or recovering from an illness are all valid and major life events that should take priority over managing your tax obligations.
#3. When You Need Time to Fix Your Tax Situation
If you find yourself in a complicated tax situation, either because you encountered issues with your federal, state, or local taxes, received a notice of tax auditing from the IRS, or simply have a unique tax situation, file a tax extension.
Seek legal advice or get assistance from a professional who may be well-versed in handling your specific tax situation, such as a tax accountant or a CPA.
How to File for Tax Extension?
To file for a tax extension, fill out Form 4868 (Application for Automatic Extension of Time to File U.S. Individual Income Tax Return). You can do so online or by mail:
#1. Online
Head to the IRS website to file your tax extension online. Take advantage of the IRS’ Free File Program, where they have partnered with companies that offer user-friendly software for managing your tax return files.
Free tax software is available for you to use so you can electronically generate your tax filing extension instantly. Upon successfully filing a tax extension, expect an email within 24 hours that verifies your extension.
If you’ve paid your taxes owed online, whether partially or in full, then you don’t have to file a Form 4868 to get an extension.
#2. By Mail
Alternatively, if you’re a bit old school and still prefer to use the good old mail, all you have to do is download your Form 4868 through the IRS website. Print the form, fill it out with all the correct information, seal it in an envelope, and mail it to the IRS.
Filing for a tax extension via mail could mean it might take a while before receiving a confirmation or acknowledgment of your request. The sheer number of snail-mailed tax returns and requests from dozens of senders is enough to delay any response from the IRS.
When Are Tax Extension Requests Approved?
Generally, most tax extension requests are approved instantly. If you filed for an extension online, there is a higher chance of receiving approval in just 24 hours.
If you filed via mail, expect a longer time to receive a confirmation from the IRS. But if you know that there are no issues with your tax documents, then it is safe to assume that your tax extension has been approved even without waiting for the IRS to send a response.
The IRS’ toll-free number, 800-829-3676, is available for those who want to call and inquire for updates on their tax extension requests.
Special Rules for Extending the Tax Payment Deadline
Some circumstances, such as a taxpayer’s location, the nature of their work, their specific state, and even natural disasters, merit special rules in granting tax payment deadlines.
Let’s elaborate on each of these special rules:
#1. Combat Zone Extension
Extending the tax return and tax payment deadlines is automatic for taxpayers who work in the combat zone. It is especially true if they are also part of a contingency operation that requires them to stay far from the country for extended periods.
An initial 180 days are applied as an extension following the last day that the taxpayer takes part in a contingency operation or works in a combat zone. The 180-day extension may also start on the last day of hospital confinement, possibly due to the need to undergo treatment and rehabilitation.
#2. Out of the Country
Taxpayers based outside of the U.S. may be eligible for a maximum two-month extension to file their tax payments and returns. The said extension commences after the original date when their taxes are due.
It is important to prepare supporting documents and a valid explanation for qualifying for the extension. Make sure to file the extension request within two months after the original due date and settle all tax payments on or before the deadline.
#3. Taxpayers Based in Maine or Massachusetts
People from Maine and Massachusetts tend to get an extra day as an extension to their tax filing deadline thanks to the state holiday, Patriot’s Day. It is celebrated yearly on the third Monday in April.
If the state holiday falls exactly on the same date as the deadline for filing tax returns, then the deadline is moved to the day after.
#4. Estate Tax Return Extension
The estate tax is imposed on a deceased taxpayer’s real estate property. The tax is levied before the estate is distributed to their heirs or beneficiaries.
The estate’s administrator must file Form 4768 to be granted an extension to file estate tax returns. Estate tax returns are filed on Form 706.
The regular extension period for estate tax return extensions is nine months. However, if the administrator is out of the country, they may file for an extension with the IRS, provided that they send their request before the initial nine-month extension expires.
If granted, the tax filing due date may be extended for up to 12 months.
#5. Business Tax Return Extensions
When it comes to business tax return extensions, different forms are used to file for due date extensions:
Business Type | Where they file income tax return | Where they file tax return extension |
|---|---|---|
Sole proprietorship | Form 4868 | |
Partnership | May be granted an automatic extension for up to six months. | |
Corporation |
#6. Natural Disasters
The IRS grants tax relief for victims of natural calamities and allows them additional time to pay and file their federal taxes owed and tax returns. Before granting tax relief, the IRS waits for an official declaration from the Federal Emergency Management Agency.
Is There a Penalty for Filing for a Tax Extension?
The good news is that there are no penalties for filing a tax extension. The IRS is very considerate when it comes to providing leeway to taxpayers in settling their tax returns and taxes owed.
However, it becomes a different story if you fail to file your tax return, miss your tax payment deadlines, or pay less than the amount you are due to settle.
Also, in the event that you are granted an extension yet still somehow manage to miss your extended deadline, then you are in for penalties along with additional charges and interests.
These penalties and charges include:
Late Filing Penalty
The additional amount charged ranges from 5% to 25% of the amount owed by the taxpayer for each month. It is charged if the taxpayer fails to file their Form 4868 or tax return on or before the original deadline for filing taxes.
Taxpayers who fail to file their tax returns within 60 days following the deadline will be charged at least $510 in late filing fees. They may also be charged 100% of the tax amount they owe.
Late Payment Penalty
Late payment penalty or failure-to-pay penalty charges 0.5% of the taxes owed to taxpayers who fail to pay their taxes on or before the due date. The penalty charges continue to increase for each month that the taxes due remain unsettled and can reach up to 25%.
It is also possible for the IRS to increase the 0.5% penalty fee to 1% per month, but taxes still remain unpaid 10 days after the IRS has sent a final notice to the taxpayer, informing them of the intent to seize their property.
Tax Extension FAQ
#1. Why can a tax extension be rejected?
Tax extensions can be rejected if the IRS discovers errors in your personal information and needs to clarify them. Or, you may have entered the incorrect Social Security Number in their tax forms.
#2. How much does a tax extension cost?
Filing a tax extension is 100% free of charge. It also does not take more than five minutes, especially if you file your tax extension online. You can also file your tax extension via snail mail.
#3. Should you file an extension if you owe taxes?
Yes. It is better to file for an extension than face heavier penalties and consequences for filing your tax returns late and missing your tax payment deadlines.
#4. What is the deadline for filing a tax extension?
The deadline for filing tax returns for the 2023 tax year is April 15, 2024. Meanwhile, the deadline for filing a tax extension is October 15, 2024.
Final Thoughts
Always plan ahead of time, particularly when you can foresee possible hurdles that may keep you from filing or paying taxes on time.
More importantly, follow the set deadline for tax extensions strictly. Seek professional or legal help if needed to regulate any possible penalties you may incur if you miss the due date.
