Tax Extension Mistakes to Avoid

• admin
• January 28, 2025
• 6 min read

Tax Extension Mistakes to Avoid

When it comes to requesting a tax extension from the IRS, you don’t have to worry about much. They will grant your request, without questions, as long as you follow the proper procedure. Despite the fact that obtaining a tax extension is so simple, many taxpayers make mistakes every year.

Below are several tax extension mistakes that you can avoid:

1. Thinking that a tax extension gives you the right to pay later as well. With an extension you are being granted six more months to file your tax return. This does not mean that you also have more time to pay any tax you owe. You must still remit payment to the IRS by the original due date on your return (generally April 15th). If you do not send payment to the IRS, they will begin to charge you both penalties and interest.
2. Believing that you don’t have to do anything in order to get a tax extension. While the IRS is almost always guaranteed to grant you more time to file, they do require that you take some steps to begin the process and let them know. Most notably, you need to complete Tax Form 4868 (Application for Automatic Extension of Time to File U.S. Individual Income Tax Return). On this form, you must provide information about yourself and submit it with payment for any taxes that you owe.
3. Filing for a tax extension when you are due a refund. Did you know that if you are owed a tax refund you don’t have to file for an extension? The IRS will automatically grant extensions to taxpayers who do not owe any taxes. Thus, filing Form 4868 would be a waste of time.
4. Assuming that you can get more than six months. Some people think that they can file for an initial six-month extension and then add extra time to their extension in the future ― this is very rarely the case. The IRS may grant two additional months in particular situations, but this is usually only done for taxpayers who are out of the country or on active duty military service. A six-month extension shifts your filing deadline to October 15th (of that same year), which should give you plenty of time to complete and file your return.

The tax extension process is relatively straight forward and easy to follow. That being said, many taxpayers have gotten confused and made the above errors. As long as you avoid these common mistakes, you should be able to receive a tax extension without any problems.

Common Tax Extension Pitfalls

The first and foremost consideration when filing for a tax extension is to understand that the extension allows for the later filing of the Federal Income Tax Return, it does not allow for late payment of the taxes due without interest or penalties which are incurred from the due date of April 15th.  The estimated taxes due must be calculated and paid when filing for the tax extension.

Remember though, that the penalties for filing late are much more than the penalties for paying late, so by all means, if you need to file for a tax extension to prepare your tax return, do so by the April 15th deadline and give yourself some breathing room and a chance to review all opportunities to reduce the amount of taxes due either by qualifying tax deductions or tax credits.

One disadvantage to filing for a tax extension is that once April 15th passes, you are no longer able to file your Federal Income Tax Return electronically.  It must be completed and sent through the U. S. Postal Service or some other ground service means.

The IRS will notify you when they receive your Federal Income Tax Return, however, they don’t always notify you when you file your Tax Extension Form 4868.  ALWAYS make a copy of any tax documentation you prepare and send.

Filing for that tax extension also relieves any angst and stress related to rushing to collect documents, finding an auditor or tax professional available to assist with your tax preparation, or actually preparing the tax forms yourself.  However, the downside is that you still have to make time to gather up and prepare for filing your Federal Income Tax Return by the October 15th deadline.  Don’t put it aside and figure you’ll cross that bridge in the future ― else you’ll be in the same boat you were when you opted to file for the tax extension ― rushing to meet the filing deadline!

Remember too, that contributions to qualifying retirement plans, that can be itemized and deducted from your adjusted gross income (AGI), have to be made before the April 15th deadline in order to qualify for the preceding tax year. This holds true whether or not you file for a tax extension.

Additionally, as you’re preparing to apply for a tax extension, estimate the amount of taxes you owe that year, and if in doubt, pay a little more than you think you owe.  Pay the estimated taxes due when you file for the tax extension.  If you overpay, you will receive a tax refund.  Interest is charged from April 15th on any unpaid taxes due the Internal Revenue Service and they will collect!