If you cant file your taxes by the April 15 deadline, theres a free, easy way to submit a federal tax extension online, experts say.
Nearly 1 in 3 American admit that they procrastinate when it comes filing their taxes, according to a January survey of more than 1,000 U.S. filers from IPX1031, an investment property exchange service. In addition, about 25% do not feel prepared to file their taxes, the survey found.
As of March 21, the IRS received roughly 80 million individual returns of the 140 million expected this filing season, the agencys latest reporting shows.
Many natural disaster victims have an automatic tax extension, which varies by jurisdiction. Military members serving in a combat zone also have more time to file.
However, the federal tax deadline for the majority of taxpayers is April 15. Its possible to push that due date to Oct. 15 by filing for an extension.
But its an extension to file, not an extension to pay, said Jo Anna Fellon, managing director at financial services firm CBIZ.
After the tax deadline, you will start incurring the failure-to-pay penalty of 0.5% of your unpaid taxes for each month or partial month that your taxes remain unpaid. The failure-to-pay penalty has a maximum charge of 25% of your unpaid taxes.
Thats cheaper than the failure-to-file penalty, which applies when you dont submit your return by the deadline. The failure-to-file penalty is 5% of unpaid taxes monthly, also limited to 25%.
But youll also owe interest on your unpaid balance, which is currently 7% and accrues daily after April 15.
You can estimate your taxes owed by creating a pro forma return or mock version of your filing using as many tax forms as possible, Fellon said.
The easiest way to file an extension
There are a few free options to file a tax extension.
For federal taxes, you can complete Form 4868 and mail it to the IRS. But its better to file digitally to avoid processing delays amid the agencys shrinking workforce, experts say. Paper filing can also increase fraud risk, they say.
The easiest way is by choosing extension when making a payment for 2024, which automatically submits Form 4868, according to Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida.
It takes all of five minutes, and you can double-check the transaction via your IRS online account, he said.
Alternatively, you can file your extension for free online via IRS Free File, a public-private partnership between the IRS and several tax software companies.
For the 2025 season, you can use IRS Free File for returns if your adjusted gross income, or AGI, was $84,000 or less in 2024. But theres no income limit to file an extension, Lucas said.
