What is Tax Extension and How to File It

August 22, 2018

A tax extension can get you 6 more months to file your tax return, but it doesn’t grant you an extension to pay taxes that you owe. It means that even if you file for an extension, you still need to pay all or part of your estimated income tax due by April 15th. Otherwise, you’ll owe interest. You may also be charged penalties.

File an extension is extremely easy and doesn't take much time.

 

Individuals:

Individual tax return due date for filing the extension is April 15th. There are three ways to file for an extension:

1. You can pay all or part of your estimated income tax due and indicate that the payment is for an extension using Direct Pay, the Electronic Federal Tax Payment System, or using a credit or debit card. It’s a great option to avoid paperwork! You don’t need to file Form 4868 if you make a payment using IRS electronic payment options. The IRS will automatically process an extension of time to file when you pay part or all of your estimated income tax electronically.
2. You can file Form 4868 electronically by using a tax professional who uses e-file.
3. You can file a paper Form 4868 and enclose payment of your estimate of tax due.

 

Every individual can file an extension for FREE. Follow this link FREE Filing for a free e-file, but don’t forget that you can e-file for free only if your adjusted gross income doesn’t exceed $66,000. For those above $66,000, use paper form 4868 and mail it.

 

Corporations:

The due date for C-Corporation is April 15th. For S-Corporation, the due date is different due to the reason that S-Corporations are pass-through entities and Form 1120-S must be filed by March 15. Therefore, the extension must be filed by March 15th. The process to file for an extension for corporations is almost the same as an individual. There are two ways to file for an extension:

1. You can file Form 7004 electronically by using a tax professional who uses e-file.

2. You can file a paper Form 7004 and enclose payment of your estimate of tax due. This option is FREE but if Form 7004 is filled out incorrectly, it may result in denial of the extension. 
 

Extension for LLC:

The process to file for an extension for LLC is the same as for corporations with the only difference that it must be filed before March 15th. The due date is different because every extension must be filed before the tax return due date. The Form 1065 (Partnership) is due March 15, therefore an extension must be filed before this date. The due date for a single member LLC is April 15.

 

If you can't pay, file an extension or tax return anyway.

 

Don’t worry if you can’t pay the full amount by April 15th. IRS offers various options to pay over the time. The most important is to file your tax return or extension on time because the IRS penalty for failing to file your tax return (or for an extension) is much more severe than the penalty for failing to pay.

 

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