Tax Extensions: Common Questions

• admin
• January 29, 2025
• 6 min read

Here at FileLater, we get a lot of questions about taxes and tax extensions. So if you’re feeling a little confused, don’t worry ― you’re in good company! Here are a few of the most commonly asked questions about tax extensions that we get every year, and our answers.

What Is Tax Liability?
This is basically a fancy word for your annual income tax bill. It’s the total amount that you owe to the IRS that year. The term “tax liability” does not refer to anything that has been taken out of your paycheck throughout the year ― just what you owe overall. For example, let’s say that you made $70,000 this year and you owe $10,000 to the IRS. Also, let’s assume that you’ve paid $8,000 in taxes so far through withholding (from your wages). That means your total tax liability is $10,000 and your current tax balance is $2,000 (because $10,000 – $8,000 = $2,000).

Do I Have to File a State Tax Extension Also?
It depends on the state where you live/work. Each state has its own tax laws regarding income earned within the state (as well as income earned outside the state by residents). Some states will grant you a six-month tax extension for any reason that you need. Other states automatically approve your state tax extension when you file for a federal tax extension. Note that some states also have their own paperwork that you will be required to fill out. You can get all the information you need for state income tax extensions right here at FileLater.

Do I Need to Give the IRS a Good Reason for Getting a Tax Extension?
Absolutely not! The IRS automatically grants income tax extensions to anyone who fills out the proper form and submits on time. You can get a six-month personal tax extension and/or a five- or six-month business tax extension.

What’s the Process for Filing a Tax Extension, and How Long Does It Take?
With the FileLater system, it’s incredibly easy to get a tax extension. All you have to do is fill-in some personal information, which is kept confidential and shared with no one except the IRS. FileLater will electronically submit (e-file) your IRS form (Tax Form 4868 for individuals or Tax Form 7004 for businesses). Within a few days, you will receive notification that you’ve been approved for a tax extension, which means you now have until September (for most businesses) or October (for individuals) to file your tax return. If, for any reason, your tax extension request is rejected, FileLater will help determine why and you’ll be allowed to re-submit your extension for free.

What Does It Mean That FileLater Is an “Authorized IRS e-file Provider?”
This means that the IRS has approved FileLater’s system and authorizes us to electronically submit tax forms (such as tax extension requests) on the taxpayer’s behalf. The authorization process is strict and rigorous, so you can trust that your information is secure. You can find FileLater on the official list of Authorized IRS e-file Providers (listed as “BANKS.COM, INC.”) on the IRS website.

What Happens If My Tax Extension Gets Rejected?
Not to worry! FileLater will email you to let you know what happened and why. You will also be advised on how to fix the problem. Then you can re-submit your tax extension with FileLater at no additional charge. There is also no IRS penalty for re-submitting a tax extension.