Tax Filing Extension: Understanding Its Purpose and Process

Julia Kagan is a financial and consumer journalist, formerly a senior editor for personal finance at Investopedia.

What Is a Tax Filing Extension?

A tax filing extension is an allowance granted by the Internal Revenue Service (IRS) for taxpayers who cannot submit their federal tax returns by the standard deadline. Individuals can request an automatic six-month extension by submitting IRS Form 4868, while most businesses may use IRS Form 7004 to qualify for the same extension period.

For the 2024 tax year, the original filing deadline is Tuesday, April 15, 2025. Taxpayers must file their extension requests by this date. If approved, the new filing deadline extends to October 15, 2025. However, any taxes owed are still due by April 15, 2025, regardless of the extension.

Key Points to Remember

• A tax filing extension allows more time to file your return but does not extend the time to pay taxes.
• Individuals use IRS Form 4868 to request a six-month extension.
• Businesses typically use IRS Form 7004 for the extension.
• Paying taxes on time is crucial to avoid penalties, even if you file for an extension.

Extension to File vs. Extension to Pay

It is important to understand that a filing extension grants additional time to submit tax documents but does not delay the payment deadline. Taxpayers who fail to pay on time may incur penalties and interest.

The penalty for not filing on time can be as high as 5% of the unpaid tax per month, up to a maximum of 25%, whereas the penalty for not paying on time is generally 0.5% per month. Interest also accrues on unpaid taxes until they are fully settled.

If a tax return is over 60 days late, the IRS imposes a minimum penalty of $485 or 100% of the tax due, whichever is less.

Note:

While some states accept the IRS filing extension, others require a separate state-specific extension form.

How to Apply for a Tax Filing Extension

You can request an extension through one of the following methods:

1. Make a full or partial payment of your estimated taxes and indicate it is for an extension.
2. Submit IRS Form 4868 electronically via the IRS e-file system, either independently or through a tax professional.
3. Mail a paper copy of IRS Form 4868 along with any estimated tax payment.

Special Situations

U.S. citizens and resident taxpayers living abroad on the normal filing deadline automatically receive a two-month extension to file and pay without needing to submit an extension request. However, interest will still apply to any payments made after the original deadline.

Corporations and partnerships have different extension deadlines based on their tax year end:

• C corporations: Extension due by the 15th day of the fourth month after the tax year ends.
• S corporations and partnerships: Extension due by the 15th day of the third month after the tax year ends.

For example, an S corporation with a fiscal year ending April 30, 2025, must file its extension request by July 15, 2025.

Quick Fact

Filing for an extension does not require you to provide a reason.

Are There Penalties for Filing an Extension?

The IRS does not impose penalties for filing an extension. However, failure to pay any taxes owed by the original deadline will result in penalties and interest charges.

Steps to File a Tax Extension

Individuals should complete IRS Form 4868, while businesses use Form 7004. These forms can be submitted by mail or electronically through the IRS e-file system. Tax professionals can also assist with filing extensions.

Is It Too Late to Request an Extension?

Extensions must be filed by April 15, 2025, for the 2024 tax year. If granted, the extended filing deadline is October 15, 2025.

Summary

To avoid late filing penalties, submit your tax extension request by the standard tax deadline, typically April 15. This grants a six-month extension to file your return but does not delay tax payments. Ensure any taxes owed are paid by the original deadline to minimize penalties and interest.

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