Tax Extension Deadline, How Long Does a Tax Extension Last?

Tax Extension Deadline

The tax-extension deadline for 2022 returns is approaching, with October 16th being the last opportunity to file without incurring late filing penalties, according to the IRS. Financial experts recommend getting organized to meet this deadline, emphasizing the importance of avoiding incomplete filings in the final days.

Failure to file by the deadline may result in IRS penalties, including a 5% monthly penalty on unpaid taxes, capped at 25%, along with a 0.5% per month failure-to-pay fee, both of which accrue interest.

Additionally, taxpayers may be eligible for IRS Free File, with roughly 70% qualifying for this service, although only 2% utilized it in the 2022 filing season. To be eligible, one must have a 2022 adjusted gross income of $73,000 or less. However, this option is only available until midnight on October 16th. It is particularly suitable for those with straightforward returns who do not require ongoing tax-planning advice and can benefit financially from this free service.

Furthermore, there are limited opportunities left to claim a 2022 tax deduction before filing. Self-employed, contract, or gig economy workers can still contribute to a simplified employee pension (SEP) individual retirement account (IRA), which can provide a deduction and aid in retirement planning. SEP IRAs can be established as late as the business's income tax return deadline, including extensions, as per the IRS guidelines.

How Long Does a Tax Extension Last?

A tax extension, once requested, automatically provides an additional six months beyond the original tax filing deadline. This extension allows taxpayers to have more time to complete their tax returns.

For example, if the original tax filing deadline is April 15, the extended due date would be October 15. However, it's important to note that the extension grants additional time for filing the tax return, not for paying any taxes owed. If taxes are owed, they should be paid by the original deadline to avoid penalties and interest charges.

What is a Tax Extension?

A tax extension is a formal request for additional time to file your Federal Income Tax return with the IRS. This extension allows taxpayers to postpone their filing deadline, providing some relief from the pressure of meeting the original tax filing due date. To request a tax extension, individuals can use IRS Tax Form 4868, which can be submitted online or by mail.

In 2023, filing an extension by April 18, 2023, extends the tax filing deadline to October 16, 2023. It's important to note that while tax extensions grant extra time for filing the return, they do not extend the deadline for paying any taxes owed. To minimize penalties and interest, taxpayers should submit an estimated payment for their taxes when requesting an extension.

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How Do Tax Extensions Work?

A tax extension is a formal request made to the IRS for additional time to file one's federal income tax return. It serves as a valuable tool for individuals who require extra time to complete their tax returns without incurring late filing penalties. To request a tax extension, Form 4868 should be submitted to the IRS either online or by mail before the tax filing deadline.

In the year 2023, filing an extension request by April 18, 2023, extends the tax filing deadline to October 16, 2023. However, it's essential to remember that tax extensions extend the filing deadline, not the due date for tax payments. To minimize additional penalties and interest, taxpayers should make an estimated tax payment when requesting an extension.

One common misconception about tax extensions is that they grant additional time to settle outstanding tax bills. In reality, tax extensions primarily offer an extension for filing the return, and they do not change the due date for tax payments. If individuals require more time to manage their tax bills, the IRS provides payment plans that enable them to pay their tax liability over time.

While a tax extension can be particularly useful for those missing essential tax documents or needing extra time to organize their paperwork, the IRS still expects taxpayers to submit an estimated tax payment by the original tax day if they owe taxes. Failure to pay the taxes owed on time may result in interest and late-payment penalties, although paying at least 90% of the actual tax liability by the deadline and the remaining balance with the return may lead to reduced late-payment penalties.

Notably, if a taxpayer anticipates a refund, the IRS does not impose a failure-to-file penalty for late-filed returns, but filing a tax extension can be a prudent choice to accommodate any unforeseen tax liabilities.

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What are the Steps to File a Tax Extension?

Filing a tax extension is a straightforward process that can provide you with extra time to complete your federal income tax return. Here are the steps to file a tax extension: 

Obtain Form 4868: The most common form used to request a tax extension is IRS Form 4868. You can download this form from the IRS website or pick up a paper copy at a local IRS office.

Complete Form 4868

Fill out the necessary information on Form 4868. This includes your name, address, Social Security number, an estimate of your total tax liability, and the amount of tax you've already paid.

Calculate Your Tax Liability

To file an accurate extension, calculate your estimated Tax Liability for the year. This should be based on your income, deductions, and credits. You can use tax preparation software or consult a tax professional for help with this step.

Make a Payment

If you owe taxes, it's essential to make an estimated payment along with your extension request. Failing to make a payment can result in interest and penalties. Include your payment information on the Form 4868.

Submit the Form

You can submit Form 4868 electronically through the IRS's e-file system or mail the paper form to the address provided in the instructions. Ensure it's postmarked on or before the original tax filing deadline.

Keep a Copy

After filing your tax extension, it's crucial to keep a copy of Form 4868 and any payment confirmation for your records.

File Your Return

While the extension gives you extra time to file your return, it doesn't extend the deadline for paying any taxes owed. Be sure to file your complete tax return by the extended deadline, which, for 2023, is October 16th.

What are the Other Common Ways to File a Tax Extension?

Explore various methods to file a tax extension beyond the conventional route. From utilizing IRS Free File for those with lower incomes to leveraging tax software, working with a tax preparer, or opting for a traditional mail-in approach, discover alternative pathways to extend your tax filing deadlines.

IRS Free File

The IRS partners with a nonprofit organization called the Free File Alliance to provide access to free tax-prep software, allowing individuals with an adjusted gross income of less than $73,000 to file an extension online.

Tax software

Most tax software providers support filing Form 4868 for tax extensions. Users can follow the program’s instructions to electronically file a tax extension, receiving an electronic acknowledgment from the IRS upon submission.

Tax preparer

Individuals working with a tax professional or preparer can inquire whether they can file for a tax extension on their behalf.

By mail

Applying for a tax extension on paper involves filling out Form 4868 and sending it to the IRS via mail. It is advisable to obtain proof of mailing.

What States Have Federal Tax Deadline Extensions?

Due to FEMA-declared natural disasters, federal tax deadlines have been extended in several states. This extension covers individual income, business, and quarterly tax filing due dates. Generally, individuals and businesses residing or established in counties recognized by the IRS as affected by the disaster qualify for this relief.

If your tax-filing was hindered due to your preparer's residence in the affected county or if necessary paperwork was in the disaster area, you may also qualify. For additional information, refer to the IRS disaster relief page.