Tax Extensions: What You Need to Know
Tax season can be stressful, but did you know you can request a tax extension if you need more time to file? While an extension gives you extra time to submit your return, it does not extend the time to pay any taxes owed. Here’s what you need to know about filing a tax extension and avoiding penalties.
How to File a Tax Extension
If you need additional time to prepare your tax return, you can file Form 4868 with the IRS. This grants you an automatic six-month extension, moving your filing deadline to October 15, 2025. Extensions can be requested electronically through tax software, a tax professional, or the IRS Free File service.
Key Points to Remember:
✅ An extension gives you more time to file, NOT to pay.
✅ If you owe taxes, you must estimate and pay the amount due by April 15, 2025, to avoid penalties and interest.
✅ Late payment penalties are 0.5% per month on unpaid taxes, plus interest charges.
✅ Filing an extension helps you avoid the failure-to-file penalty, which is much higher than the failure-to-pay penalty.
Who Should Consider Filing an Extension?
Self-employed individuals needing more time to organize business deductions.
Taxpayers with complex investments requiring additional documentation.
Those waiting on tax documents, such as K-1s from partnerships or corrected 1099s.
How to Avoid IRS Penalties
To avoid IRS penalties, pay at least 90% of your estimated tax liability by April 15, 2025. If you overpay, you’ll receive a refund when you file. If you underpay, you’ll owe additional penalties and interest.
Need Help with Your Tax Extension?
Tax Pros HQ can assist with estimating your tax liability and filing your extension correctly. Contact us today to ensure your taxes stay on track! 📞💼
