As dogged as the IRS can be when it comes to collecting taxes owed by individuals and business owners across the country, even they understand that sometimes circumstances can prohibit someone from meeting the April tax filing deadline. In such situations, it is possible to apply for an extension that could give you up to six more months (five months for businesses) to get your proverbial tax-related ducks in a row and your return submitted.
Individual filers (even married ones) living in the U.S. can request an extension by submitting IRS Form 4868. This form can be submitted electronically for convenience, and there is no fee to request an automatic extension.
There are separate forms available for different categories of tax filers, including:
- Businesses expecting an operating loss
- Servicemembers in a combat zone or “qualified hazardous duty area”
- Expatriates living abroad but who still make sufficient income in the U.S. to justify filing taxes
- Exempt organizations
The extension is for the return itself, not the taxes owed
The most important rule of IRS extensions is this: the extension is only to get the return itself submitted. It doesn’t mean that you have an additional six months to pay taxes owed. Tax payments are still due on the original filing deadline; for 2017, this is April 18. If you need the time to prepare your taxes to find out the exact payment, you should preemptively pay an estimated amount by the deadline.
Though an extension can’t give you additional time to pay your taxes, it could help prevent additional penalties for late filing. The late filing penalty (five percent of the total tax due) is much more significant than the late payment penalty (.5 percent of the total tax due); filing the extension could potentially save you thousands in late filing fees depending on how much money you owe. Unless you get the taxes paid by the original deadline, though, you’ll still owe the late payment penalties and potentially other interest or fees as well.