How to File a Tax Extension: It’s Easier Than You Think

by
Robby Nelson, CPA
Updated 
April 14, 2022
April 14, 2022
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Imagine you’re about to put together an IKEA entertainment unit that seems to have a thousand pieces. Now, imagine that the assembly manual is written in a language you don’t even recognize.

That’s what dealing with the IRS can feel like. Its resources are supposed to explain how taxes work to the public. But they’re dense, overly complicated, and might as well be written in another language.

The IRS’s inability to clearly communicate with taxpayers is part of what keeps Certified Public Accountants like me in business. Still, I believe everyone should be able to understand at least the basics of the tax system. Especially when it comes to important subjects such as filing for a tax extension — which, despite the IRS’s best efforts to complicate things, is really quite simple.

Honestly, it’s true. When it comes to taxes, filing an extension is one of the easiest things you can do. So let’s get to it!

Contents

What is a tax extension?

Typically, the deadline to file and pay your taxes is April 15. (In 2022, this deadline has been moved to April 18.)

A tax extension gives you six extra months to file your taxes. In other words, you’ll typically have until October 15 to submit the paperwork that shows your earnings and the taxes you owe to the IRS. (In 2022, this falls on October 17, since the 15th is a Saturday.)

Important note: A tax extension does not give you any additional time to pay your taxes. Those are due by the tax deadline — with or without an extension. (You can, of course, just not pay them, but you’ll be on the hook for some penalties!)

Not sure you’ll know how much to pay without filing your taxes? Don’t worry — the form you’ll use to ask for an extension gives you the chance to figure it out. (The IRS also has payment plan options that can help people who aren’t able to pay their taxes in full by the deadline. Learn more here!)

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Who should file for a tax extension?

Anyone who knows they won’t be able to file by the deadline can — and should — request an extension. It’s a great solution for people who are running behind because of late tax forms, waiting on tax forms that need to be corrected, or just in need of more time to organize their bookkeeping.

If you don’t get an extension, filing your taxes after the deadline can result in some pretty hefty penalties. (More on that shortly!)

There are, however, a few instances where requesting one isn’t necessary, even if you don’t intend to file by the deadline.

Who doesn’t need to request an extension?

Some people automatically receive a two-month extension for filing their taxes, whether or not they request one. This includes:

  • 🌍  US citizens or resident aliens who are living and working abroad on the date of the tax deadline
  • 🇺🇸  On-duty military members who are outside the US on the date of the tax deadline

For people in these situations, their tax deadline is June 15. If they still need more time to file, they can also request an extension, which will push their filing deadline back to October 15.

You can learn more about who is eligible for an automatic extension here.

How to file for a tax extension by mail

While IRS lingo might be difficult to make sense of, filing a tax extension is quick and simple! In fact, walking you through the steps of requesting an extension by mail should only take about two minutes.

Ready? Let’s get started.

This is the extension voucher. It’s called Form 4868.

Part of a black Form 4868, used to request tax extensions

As you can see, the left side of the form asks for general information about yourself, like your name, address, Social Security number, and the like.

The right-hand section is where you’ll calculate your estimated individual income tax. Juicy stuff, right?

Let’s go through the steps of filling out this section, line by line.

Line 4: Estimate of total tax liability

How much tax are you expecting to owe the IRS? If you need a hand answering this, check out our free income tax calculator — which can help both W-2 and 1099 workers figure out how much they’ll owe!

If you’re a freelancer, independent contractor, or small business owner, don’t forget — you can lower your taxable income with business write-offs!

Keeping track of everything you buy for work can help you save a lot of money — especially considering how much higher taxes are for self-employed people.

If you want a little more guidance when it comes to finding and claiming write-offs, give the Keeper Tax app a try. You can text our bookkeepers all of your questions and get individual support for your situation. When it’s time, you can go ahead and file right through the app. If you’re a last minute filer, we’ll even request an extension for you at no extra cost.

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Line 5: Total payments made so far

What payments have you already made towards your tax return? This might include withheld taxes for W-2 employees or quarterly payments made by 1099 workers.

Line 6: Balance due

Subtract the amount in Line 5 from the amount in Line 4 and put the result here. If you overpaid your taxes and end up with a negative result, just put a zero here.

Line 7: Amount you’re paying

This is the total amount of taxes you owe. Usually, it’ll be the same as the balance due.

Remember, filling out Form 4868 lets you file at a later date. But to qualify for an extension, you’ll still be expected to pay your taxes by the deadline if you don’t want to deal with penalties. If going through the math on the worksheet somehow has you overpaying on your taxes, you’ll get a refund after October.

How to file a tax extension online

If you don’t want to go through the hassle of filling out paper forms, you can also submit an extension request online. Free File is an IRS tool that allows people to electronically file federal tax forms — like the tax extension voucher, Form 4868. 

There are two ways to file for a tax extension online through Free File.

Use an IRS partner site

If you think you might need a little more support, you can sign up for an account with a Free File provider — an IRS accredited software that typically guides individuals through tax filing.

This option is only available to people whose taxable income is less than $73,000.

Use Free File fillable forms

This is a self-serve option that lets you independently access and submit your federal tax forms electronically.

It’s simple to use. All you’ll need to do this:

  • 💻  Create an account
  • 🔎  Search for Form 4868
  • 📝  Fill it out
  • 📮 Submit it

This option is available to people of all income levels.

You can access Free File and learn more about both options here

As with filing a tax extension by mail, you’ll need to submit your request by the tax deadline. 

Don’t want to deal with making the request? If you sign up for Keeper Tax, we can file an extension for you — and handle getting your taxes to the IRS without you having to pay any penalties.

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How to request a “$0 extension”

Now that you know how to fill out Form 4868, whether online or on paper, I’m going to let you in on a little secret: you can submit a request for a “$0 extension.” 

It’s basically a way of telling the IRS that you’d like the six-month extension, but you don’t want to figure out how much you owe in taxes. Because the IRS doesn’t require you to enter any calculations on Form 4868 to submit it, you’ll still receive the extension.

All you have to do to submit a $0 extension is put a zero on lines 4-9 of the form. So:

  • 🧾 Line 4 - Estimate of total tax liability: $0
  • 🧾 Line 5 - Total payments made so far: $0
  • 🧾 Line 6 - Balance due: $0
  • 🧾 Line 7 - Amount you’re paying: $0
Lines 4 through 7 of a Form 4868, with zeroes filled out in each line

If you know you’re going to need an extension to file and aren’t solid on how much you’ll owe, a $0 extension can be a good solution. Of course, the IRS will still expect you to pay your taxes: you’ll face penalties if you don’t do so by the deadline.

Luckily, these “failure to pay” penalties are relatively light, at 0.5% of your unpaid tax for every month you don’t pay. Getting your $0 extension in on time will save you from the much heftier “failure to file” penalties. 

Another option is to put a zero on lines 4-6, and then enter the amount of tax you intend to pay on line 7, even if it’s just an estimate. This still gives you that extra bit of time to figure out the full amount you owe, and paying at least something will lower the penalties.

And on the note of penalties….

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What happens if you file taxes late without an extension?

If you don’t file your taxes by the deadline and don’t request an extension, the IRS can hit you with a “failure to file” penalty. This penalty is 5% of the amount of tax you owe — 10 times more than the “failure to pay” penalty. You get hit with that every month you’re late filing.

Say you owe $900 in taxes, don’t request an extension, and don’t file your taxes until July 15. Your failure to file penalty would be $135. That’s because 5% of $900 is $45, and you’ll pay that three times over for missing April, May, and June. 

Of course, the penalties will be even higher if you don’t pay by the October deadline. Check out our post on what happens when you miss the tax deadline for more information on penalties and filing your taxes late!

It can feel overwhelming to not have your bookkeeping in order when Tax Day is approaching. But there are surprisingly simple solutions that can help, like Form 4868. 

I’d wager you can fill out an extension request in a quarter of the time it takes you to build any piece of IKEA furniture.

Robby Nelson, CPA

Robby Nelson, CPA

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When not hanging out with his high profile friends like Gandhi or Batman, Robby enjoys spending time with his wife and children. He can sneeze with his eyes open, has won two lifetime achievement awards, and has visited every country; three of which haven't been discovered yet. He is also a Certified Public Accountant and assists clients with a wide variety of accounting and tax issues.

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At Keeper Tax, we’re on a mission to help freelancers overcome the complexity of their taxes. That sometimes leads us to generalize tax advice. Please email support@keepertax.com if you have questions.