Have you filed your tax return yet? Federal tax returns are due each year on April 15th.
However, you can file for an automatic tax extension if you haven’t finished your return by the deadline. The extension allows you to file your return anytime between the April 15th deadline and October 15th.
Important: Tax extensions only apply to filing your tax return. You must pay any taxes owed on or before the April 15th deadline. If you filed an automatic tax extension form, it is best to pay estimated taxes on the balance you owe. Otherwise you the IRS may charge you interest and penalties for late payment.
In general, you may not owe late filing or late payment penalties if you send the IRS 90% of your actual tax obligation, but there may be outlying situations where this doesn’t apply. The good news is that you will receive a refund if you overpay your taxes.
Let’s jump in and look at some important facts about filing a tax extension, the October 15th deadline, and any penalties and fees you may owe for failing to make timely payments or failure to file your tax return.
How Do Tax Extensions Work?
Filing for an automatic 6 month extension to file your taxes is easy. Simply fill out Tax Form 4868, Application for Automatic Extension of Time To File U.S. Income Tax Return (pdf) by the tax filing deadline. The tax deadline is usually every April 15, but the actual date can vary if that date falls on a weekend or holiday. You then have until October 15th to file your taxes with the IRS.
If you missed the deadline to file for an extension, get it in ASAP, which will minimize IRS penalties and interest owed. These penalties and fees can be substantial!
How to File a Federal Tax Extension
Filing a federal tax extension is easy – just fill out Tax Form 4868 and mail it in to the IRS. You can download it from the IRS website. Then mail in the form and you are good to go.
Alternatively, you can efile your extension paperwork by using tax preparation software like TurboTax or H&R Block Online, or by using IRS Free File Fillable Forms. If you pay state taxes, this may be all you need to do. Many states will automatically extend your state tax deadline if you receive a federal tax deadline extension.
Tax Extension Software:
After You File Your Tax Extension
Now comes the fun part – getting your taxes done. There are many options such as doing them yourself by hand, paying someone to do your taxes for you, or purchasing a software program such as TurboTax or H&R Block @Home. The sooner you get them done the better. Remember, you may owe late payment penalties if you owe more in taxes than you paid. Having a deadline hanging over your head also causes unnecessary stress.
Tax payments due by April 15th, but you can file later
If you owe money on your federal taxes you are required to pay it by April 15th, regardless of whether or not you received an extension on your taxes. The deadline only allows you to file your taxes in October (sending in the paperwork, vs. sending in the money). You don’t have anything to worry about if you are due to receive a refund.
Late Filing and Late Payment Penalties
Missing the tax deadline is not recommended. Remember, if you owe taxes this year, the payment is due to the IRS by April 15th, regardless of whether or not you have filed your actual tax return. Missing your payments can result in ugly penalties and interest charges. It’s best to file for an extension immediately, then try to get a rough idea of what you owe in taxes and make that payment as soon as you can. Even if you can only send in a partial payment, that will help reduce the amount of penalties and interest you owe.
Late filing penalties are high. The IRS will assess a late filing penalty of 5% of the unpaid taxes not paid by the due date for each month your taxes are late, usually to a maximum of 25%. It is very easy for late filing penalties to to reach several hundred or several thousand dollars. If your payment is more than 60 days past due, the minimum late filing penalty is $100 or the balance of the taxes you owe, whichever is less.
Late payment penalties and interest are also assessed when you do not send the IRS your tax obligation by the tax deadline. The late payment penalty is usually 0.5% of your unpaid taxes, with the maximum also at 25%. You may be able to have your late payment penalty waived if you paid over 90% of your obligation, however, you would still owe interest on the balance due. The interest stops accruing when you pay the balance. Translation – pay your taxes ASAP to avoid large penalties and fees!
Important tax dates
- Tax Return Filing Deadline – April 15
- Tax Return Extended Filing Deadline – October 15
- Estimated Taxes Due Dates – April 15, June 15, Sept 15, Jan 15
*Note: If the due date falls on a Saturday, Sunday, or legal holiday, the due date is extended until the following business day.
photo credit: woodsy, and Image courtesy of Stuart Miles / FreeDigitalPhotos.net.
Ryan says
In addition to the possibility of losing the paperwork, the extra fees can be killer! I guess there’s nothing like waiting until the last minute! I use TurboTax as well. It seems to meet my needs perfectly.
Bruce says
Informative article, well done.
It is estimated that 1/3 of middle to high income families file form 4868 and then wait until now to do anything about it until the first of October. I have often found this to be problematic as time passes they tend to lose, misplace, or forget some important tax information.
As a tax preparer I don’t usually recommend these people do their own but many do. In this case I recommend software (usually TurboTax).
Financial Samurai says
Do people wait until Oct 15 essentially so they can save on paying taxes?
I would think if I was a multi-millionaire who owed let’s say $200,000 in taxes, waiting til Oct 15 and collecting the interest income would be the right strategy right?
Ryan says
Taxes are actually due on April 15th, so one must at least pay estimated taxes if they aren’t sure how much they owe. The extension just gives you additional time to finish your paperwork or take care of any other loose ends. I waited several months to file because this was my first year to file with my business and I needed an accountant to provide a second set of eyes on my return.But I paid estimated taxes in April and will receive a tax return pretty soon because I overpaid.
Financial Samurai says
Ah, gotcha. Thnx for sharing Ryan. Another thing I heard was K-1’s, but that gets a little more complicated I think.
hh says
I have a question: may I apply ITIN together when I file a federal tax extension? Or I still need to submit the ITIN application together with the tax return after extension approved? Thanks a lot!
Ryan says
Hello hh, I did not know much about this process, so I read the instructions are on the IRS website: ITIN Application page
It states:
and
So, to answer your question, it seems as though you can file it at the same time as you send in your taxes. However, I am not 100% certain, so it is probably a good idea to call the IRS for verification. Best of luck!
chip154 says
Hey my son missed the deadline for his tax return. Will he be able to fill for his tax return normally or is there a site where they specialize in filing tax returns that are late?
Ryan says
He should be able to file normally (via a paper tax return, or an electronic version of TurboTax, H&R Block at Home, etc) if he files before the October 15th deadline.
Cherleen @ My Personal Finance Journey says
Similar to Ryan and Bruce, I also use Turbo Tax, which I also recommend to most of my family and friends.
craig says
What the article does not mention is that if you paid the same amount of tax owed last year, you do not have any penalty if you underpaid when filing for an extension.
Vanessa says
I have yet to file my taxes this year. Will the IRS still provide a refund after 10/15 deadline?
Preston Odenbrett says
A bit confused- I am self-employed but this year did not have enough expenses so now I owe and off to work I go. However, the issue is it is more than I have ever paid in before and it looks like even though I filed my taxes on time so to speak- I still owe this huge amount here in October 15th- Plus I needed to pay tax estimates / for this year on top of this? That is a whole lot of money monthly. What do I do as I can’t get a loan as I am out of country and if I use the credit card to pay off my balance, it will probably cost me more in interest but have not done the complete math.
What is the best way to handle this. Installment with the IRS before the OCT 15 deadline where I can only do once but then pay a monthly fee plus esitmated taxes / quarter of 2018? which means I owe about 3 quarters that will be due in April 15 of 2019.
Is that correct, what is options I have. Running out of time to make a decision.
Amy says
Hello,
So far I cannot find anywhere if there are special or additional fees for not filing my paperwork by October 15. Currently working on them but won’t get them in by 10/15. Are there? I am assuming there are extra late fees assessed besides the fees mentioned above because October 15 is the extension deadline. I sent in a large estimated payment on April 15th that may meet the 90% criteria. Please share answer if you know.
Thank you!
Mimi says
Here’s a question I’m curious about. What happens if you don’t owe any taxes, and you filed for an extension, but you’ve realized that you’re missing an important piece of information that you can’t get before October 15th? In other words, if you don’t owe any money, but your tax forms arrived a week or so late, are there any penalties?