You Can Still Apply for a Tax Period Extension
Tax Day 2025 is finally here , and many of us are running out of time to file our taxes. You may be wondering, “ Hey, what if I just… don’t pay taxes at all?” » And you are not alone in this way of thinking. But even if you can’t pay right now, you should definitely apply before the deadline.
Luckily, the IRS offers taxpayers an easy way to get more time: filing for an extension. Let’s look at how to properly request an extension, what it means for your tax liability, and important considerations for avoiding penalties.
What does a tax extension actually do for you?
Let’s start with an important point: a tax extension gives you extra time to file your taxes, not extra time to pay the taxes you owe. More specifically:
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You have six more months to complete and file your tax forms (until October 15, 2025).
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You still must calculate and pay all taxes due by April 15, 2025.
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The extension will help you avoid a penalty for failure to file a return, which is much more severe than a penalty for failure to pay.
Anyone can request an extension for any reason: you lack documents, you’re traveling, or you simply need more time to organize your finances. You don’t need a “good reason” or any explanation. Additionally, filing an extension does not improve your chances of being reviewed . The IRS treats extended returns the same as timely filed returns.
How to apply for an extension
You have several options to secure a six-month extension.
Option 1: File Form 4868.
The official way to request an extension is to file IRS Form 4868, Application for Automatic Extension of Time to File a U.S. Individual Income Tax Return.
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Fill out the form with your personal information.
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Estimate your total tax liability for 2024.
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Determine if you owe any remaining taxes.
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Submit the form by April 15, 2025, along with payment of any taxes due.
The form is relatively simple and requires basic information such as your name, address, Social Security number and estimated taxes.
Option 2: Electronic submission
You can also apply for an extension electronically. The IRS Free File program offers an extension here. Commercial tax programs such as TurboTax and H&R Block should also have an “Extension File” option on their websites. Electronic filing confirms that your extension request has been received and processed.
Option 3: Payment Method as Renewal Request
If you make a payment, you can get an extension without filing Form 4868. Let’s say you make a payment through the IRS Direct Payment System, Electronic Federal Tax Payment System (EFTPS), or using your credit/debit card through an approved payment processor. When using these methods , indicate that the payment is for an extension and the IRS will automatically process the extension for your filing.
Assessing your tax liability
The tricky part of filing for an extension is estimating your tax liability when you don’t have all the documentation ready yet. To solve this problem, some strategies include:
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Use last year’s earnings as a baseline, adjusted for significant changes in income or deductions.
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Gather all the documents you have (W-2, 1099, mortgage interest statements) and make the best estimate possible.
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When in doubt , it is better to overestimate than underestimate (you will receive any overpayment back as a refund).
And moving forward, I recommend that you start using a spreadsheet to track all of your tax information throughout the year. I’ve created a basic template to get you started here . The goal is to create a convenient archive of all your tax returns in one place, making it much easier to file on time next year.
State Tax Extension
Most states provide an automatic renewal if you receive a federal renewal, but the rules vary widely. Key points:
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Some states require their own renewal forms.
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Many states have different deadlines than federal renewal deadlines.
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Some states require payment of estimated taxes along with your extension request.
Check with your state tax agency for specific requirements.
Special situations
Filing an extension application usually results in an automatic deadline of October 15, except in some special circumstances.
Americans living abroad
U.S. citizens living abroad automatically receive a two-month extension until June 15 without filing a formal request. (Filing Form 4868 extends this deadline until October 15.)
Military personnel in combat zones
If you serve in a combat zone, you receive an automatic extension of both application and pay for the duration of your service plus 180 days.
Victims of natural disasters
The IRS often provides special extensions for taxpayers affected by federally declared disasters. Check the IRS website for announcements if you are affected.
What happens if you still miss your extended deadline?
If you received an extension but were unable to submit your application by October 15th, you are in a quandary. From this moment on, a fine for failure to submit documents begins to accrue. This means 5% of unpaid taxes per month, up to 25%. You may lose the ability to make certain elections on your tax return, and you risk losing an unclaimed refund if you wait more than three years to file your return.
Bottom line
Filing an extension is a simple process that can save you from significant penalties if you need more time. Remember these key points:
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File Form 4868 or make your renewal payment by April 15.
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Pay your estimated tax debt by April 15 to avoid late fees.
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Complete your actual tax return by October 15th.
The extension gives you breathing room to file an accurate tax return rather than rushing and potentially making costly mistakes. If you’re not ready to file your taxes before tax day, taking a few minutes to request an extension is a smart financial move that could save you from much larger penalties in the future.