Extension
A request to push your tax return filing deadline from April 15 to October 15. An extension gives more time to file but not more time to pay any taxes owed.
A tax extension gives you an additional six months to file your federal tax return — from the usual April 15 deadline to October 15. You request an extension by filing Form 4868 by the original due date. The extension is automatic; you do not need to provide a reason.
Critically, an extension to file is not an extension to pay. You are still expected to estimate and pay any tax you owe by April 15. If you do not pay at least 90% of your liability by that date, you may face failure-to-pay penalties (0.5% per month, up to 25%) and interest charges.
Extensions are commonly used by taxpayers waiting for K-1 forms from partnerships or trusts, those with complex returns requiring more preparation time, or anyone who simply needs more time to gather documents. About 10 to 15 million taxpayers file extensions each year. There is no penalty or negative consequence for filing an extension as long as you pay what you owe on time.
Related Terms
Tax Return
The form(s) you file with the IRS to report income, claim deductions and credits, and calculate your tax liability or refund. For individuals, this is Form 1040.
Penalty
A charge imposed by the IRS for filing late, paying late, or underpaying estimated taxes. Common penalties include failure-to-file (5% per month) and failure-to-pay (0.5% per month).
Tax Year
The 12-month accounting period for calculating and filing taxes. For most individuals, the tax year is the calendar year (January 1 through December 31).