In simple terms, a tax extension gives you more time to file your tax return. Ultimately, you may need to file a tax extension if you're unable to complete your taxes by the April tax deadline, and it's a fairly standard process. Each year, millions of tax filers file for tax return extensions, buying them extra time to get their return sorted.
One important note is that filing a tax extension does not mean you can put off paying your tax bill. In the process of filing an extension, you still have to pay the taxes you think you'll owe, or estimated taxes at that time. If you're off by too much, you can ultimately face interest or penalties imposed by the IRS.
Filing an extension online or through the mail
If you choose to file a tax extension online, you can do so through the IRS website. To file by mail, you'll need to fill out Form 4868 and send it to the IRS. Once your extension is approved, you'll have until October 15th to file your return.
Again, It's important to note that an extension only gives you more time to file your taxes - it doesn't give you more time to pay any taxes owed. If you think you'll owe taxes when you file your return, you should still send in a payment by the April deadline. This will help avoid interest and penalties.
If you have any questions about filing a tax extension, you can contact the IRS directly. They can help you determine if an extension is right for you and walk you through the process.
Reasons why you might want to consider filing an extension
There are a few common reasons why people file for tax extensions. Here are a few of the most common:
1. You're not ready - If you simply don't have all the information you need to complete your taxes, it may make sense to file an extension. This could be because you're waiting on forms from your employer or other institutions.
2. You owe money and can't pay - As mentioned earlier, if you think you'll owe taxes but can't pay by the April deadline, filing an extension can give you more time to come up with some of the money. Realistically, this probably isn't a reason to consider filing an extension as the IRS expects you to pay 90% of your tax bill on the regular filing deadline, so extending would only potentially allow you to delay just 10% of your tax bill without a penalty.
3. You need more time to complete your return - Some people have more complex tax situations that take longer to sort out. If this is the case, an extension can give you the extra time you need.
Filing an extension is a fairly simple process that can ultimately give you more time to file your return. If you're not ready by the April deadline, consider filing an extension to avoid penalties and interest.