A tax extension allows taxpayers to extend the deadline for filing their federal income tax return by six months, from April 15 to October 15. However, a tax extension only applies to the filing of the return and does not extend the deadline for paying any taxes owed. Taxpayers must estimate and pay their tax liability by the original deadline to avoid penalties and interest.
To request a tax extension, taxpayers must file Form 4868 (Application for Automatic Extension of Time to File U.S. Individual Income Tax Return) with the IRS by the April filing deadline. Once the extension is approved, the taxpayer has until October to file their return without incurring a failure to file penalty.
While a tax extension can provide extra time to prepare and submit a tax return, taxpayers should still pay as much of their estimated tax liability as possible by the original deadline to avoid a failure to pay penalty, which accrues at a rate of 0.5% per month on the unpaid balance.