How to File a Tax Extension: Deadlines & Best Practices

If you are still compiling your tax information for your 2024 federal income taxes, filing an extension request can be a great stress-free way to get an extra 6 months to file your taxes, allowing you time to get a cost segregation study completed.

This guide will take you through the simple extension application process, clarify tax deadlines, and will provide strategies to avoid routine mistakes.

Understanding the Importance of Tax Extensions

A tax extension lets individuals and companies extend the deadline for completing their federal tax returns with the IRS. While this doesn’t give you more time to pay your taxes, it can help you prevent mistakes and avoid late filing penalties by giving you more time to get your information together.

This extra time can make a considerable difference for those dealing with unforeseen events, missing papers, or complex tax problems.

Why File a Tax Extension?

Misplaced financial records, to be completed cost segregation studies, and other unexpected events might hinder you from meeting the original filing deadline for your federal income tax return.

In these cases, filing a tax extension can prove beneficial in a few ways:

• Avoid Penalties: Late filing penalties can materially increase your tax bill. A timely extension request helps you avoid these penalties as long as your taxes are paid by the due date. Filing late without an extension may result in penalties of 5% of unpaid monthly taxes, and up to 25% of the total owing.
• Accuracy: Rushing through your tax return may result in errors, missing deductions, or incomplete forms. Extra time provides for careful reviews and proper filings, lowering the chances of triggering an IRS audit or revising a return later.
• Reduce Stress: For many taxpayers, tax season is a high-pressure time. An extension provides more breathing room. This is especially valuable for those with complex financial situations, multiple income sources, or late-arriving tax documents such as K-1s from partnerships or trusts.

Preparing to File a Tax Extension 

Like filing taxes, requesting a tax extension just takes a little planning and prep work. If you do this effectively, the process will be smooth and free of delays.

1. Understand Your Tax Return and Extension Deadlines 

For common corporations like a C corporation with calendar fiscal year-ends, the 2024 federal income tax return deadline and the extension request deadline are both on Tuesday, April 15, 2025. If your extension request is approved, you will have until October 15, 2025, an additional 6 months to file your final tax return.

If your fiscal year-end doesn’t follow the calendar year, your return is due on day 15 of the fourth month after your fiscal year-end. If you apply and are approved for an extension, you’ll have an additional six months to submit your tax return.

For example, if your fiscal year-end is March 31, 2025, your federal tax return deadline is July 15, 2025 (month 4, day 15). If you receive an extension, your new deadline is January 15, 2025.

One exception

If your fiscal year-end is June 30th, your federal tax return and extension request are both due on September 15th, which is on day 15 of the third month after your fiscal year-end (month 3, day 15).

Can a tax extension request be denied?

Filing a tax extension request is generally straightforward and automatic, and most requests are approved. However, requests may sometimes be rejected often due to missing information or incorrect details.

You’ll have until 11:59 PM on April 20 to resubmit or mail your extension if your initial request is rejected.

Trusts

It’s important to note that Trusts will have different submission dates depending on how the Trust is structured. Given this, it’s recommended you consult with an accounting professional to determine the deadline for submitting an extension application.

2. Collect Important Documents

​​Collect relevant financial documents such as W-2s, 1099s, investment records, and receipts for deductions. These forms contain the information you need to estimate your tax liability accurately.

With organized records, you can quickly identify any gaps in information that may postpone applying for an extension and remitting your estimated taxes.

3. Calculate Your Estimated Tax Liability 

You’ll still need to pay any taxes you owe by the original filing deadline, regardless of whether your extension is granted. Use your gathered documents and information to estimate your federal income taxes owed, as this will be the amount you remit to the IRS.

If you are waiting for additional information, such as a cost segregation study, you should calculate estimated taxes and pay them while you wait.  This ensures you do not underpay the IRS.  If you end up overpaying, you’ll get the money back potentially with interest once your return is filed.

Important: the IRS expects you to pay at least 90% of your total federal tax due by April 15 to avoid incurring interest.

 4. Decide How to Apply for a Tax Extension

Decide whether you’ll apply for your extension online or by mail.

E-filing generally takes less time and provides an instantaneous receipt. If you file by mail, double-check your state’s IRS mailing address and send certified mail for proof of submission.

If you owe federal taxes for 2024, ensure you have a payment method ready, too.

Payment options include IRS Direct Pay, EFTPS, or checks mailed with your extension form. Payment plans may also be available if you cannot pay the full amount by the deadline.

Step-by-Step Instructions for Requesting a Tax Extension 

Filing a tax extension is straightforward when you follow these steps:

Step 1: Ensure You Have Final Documents and Receipts

When preparing to file for an extension, you would have identified any missing documents you needed. Ensure you have received these documents to reasonably estimate how much federal tax you’ll need to pay by April 15, 2025.

If you haven’t received certain documents or backup information, that’s okay. Simply make reasonable estimations, and you can make any required adjustments when you file your return by the extension date of October 15, 2025.

Step 2. Complete IRS Forms

Individual taxpayers use Form 4868 to file a federal tax extension request. This form is relatively straightforward and requires basic personal and tax liability information.

Businesses or partnerships must file Form 7004 for an income tax extension. Form 7004 accommodates a variety of tax returns, including partnership and corporation filings.

Step 3: File Your Extension Request

• E-Filing: File taxes using a tax program or the IRS e-file. E-filing is fast, secure, and offers an instantaneous receipt. Most software programs walk you through the entire process to speed it up and help you avoid mistakes.
• Mail: Print and complete the form and post it to the correct IRS address indicated on the form. Send through certified mail to ensure receipt. Keep a copy of all documents for reference.

Step 4: Pay Your Estimated Taxes

Even with an extension, unpaid taxes must be paid by the original deadline. Paying late will incur penalties and interest.

There are three different ways to pay:

• IRS Direct Pay: Send money directly from your bank account.
• Online Federal Tax Payment System (EFTPS): Open an account and pay electronically. This method is particularly effective for companies and repeat filers.
• Mail: Attach a check or money order to your extension form. These go to the “United States Treasury.” Write your SSN, tax year, and Form 4868 on the memo line for processing.

Step 5: Confirm Submission

For online submissions, you’ll receive an electronic confirmation. If mailing your form, retain proof of mailing, such as a certified mail receipt, to verify timely submission.

This confirmation is important as it gives you peace of mind your bases are covered and provides evidence in case of disputes.

Step 6: Track Your New Deadline 

Once your extension is approved, your new federal return deadline is October 15, 2025. Mark this day on your calendar and prepare to file your federal income tax return.

Use this time wisely by gathering missing documentation or consulting with a tax professional.

Requesting a Tax Extension: Best Practices

The tax extension process will go a lot more smoothly with certain best practices followed.

Here are four of the most consequential:

1. Estimate Taxes Accurately: Use prior years’ returns in addition to your current financial documents to calculate your tax liability. Overestimating can avoid underpayment penalties; however, underestimating can result in interest charges.
2. Submit Your Request As Soon As Possible: Don’t wait until the last minute to submit your extension request. Early filing reduces the risk of errors or delays due to technical issues or processing backlogs.
3. Organize Your Records: Maintain detailed records of all communications, submissions, and payments related to your extension. Organized records make it more manageable to resolve discrepancies and simplify future filings.
4. State Taxes Are Not Automatically Extended: With the exception of states that have no income tax, each state has its own tax extension laws. Verify the deadlines and forms for your state’s income tax extension. If you miss state deadlines, you may face fines and other issues from local tax officials.

Additional Resources

Are you looking for more in-depth guidance with the 2024 tax deadline?

Here are two more resources and strategies to consider:

1. Use Professional Tax Software: Programs like TurboTax or H&R Block can help with the extension process and verify compliance. Many programs offer audit defense services, too.
2. Consult a Tax Professional: Tax experts can offer personalized and professional help for complex situations. Professionals are especially beneficial to high-income individuals, business owners, and anyone with worldwide tax obligations.

How to File a Tax Extension: Summary

Filing a federal income tax extension is easier than you might think and provides valuable extra time to file your tax return accurately, reducing the risk of errors and penalties.

Above all, understand that a tax extension does not extend the time to pay taxes owed. Your extension request must be submitted by the original filing deadline, and you must pay estimated taxes on time to avoid penalties.