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The Ultimate Guide to Filing a Personal Tax Extension in 2022

Deadlines & Extensions Tax Filing Taxes

The April 18 tax deadline is quickly approaching. If you haven’t filed your taxes yet and are starting to feel the pressure, you’re not alone. According to a recent IPX 1031 survey, one-third of Americans say they wait until the last minute to file their taxes. But if tax season snuck up on you this year, there’s no need to panic — you can always request a tax extension.

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What is a tax extension?

If you need more time to file your individual federal income tax return, you can request an automatic tax extension from the IRS using Form 4868. The filing deadline to request a tax extension is the same as filing your return, April 18, 2022.

A tax extension will give you an additional six months to file your taxes; this year’s tax extension due date is Oct. 17, 2022.

Will filing a tax extension give me an extension of time to pay my tax bill?

No, a tax extension only gives you more time to file your return; it doesn’t give you extra time to pay any taxes you owe. You must pay your tax bill by the Tax Day deadline to avoid late payment penalties.

When you request a tax extension with Form 4868, you can estimate and pay your total tax liability for the tax year. To help estimate your potential tax liability, try to complete your return as much as possible, estimating wherever necessary.

What are the pros and cons of filing a tax extension?

Filing for a tax extension is an excellent option for many taxpayers who feel stressed about tax season or have other commitments on their plate and just need more time.

Requesting an extension from the IRS is also an easy process, and you don’t need to give a compelling reason why you need more time to file. So long as you submit your extension request form on time and correctly, approval is typically automatic, and you’re granted an extension.

The downside of filing a tax extension is that it only gives you more time to file, not more time to pay. As discussed in the last section, you’ll still need to estimate and pay any taxes you might owe by the tax filing deadline (April 18 this year).

Another trap many extension filers fall into is waiting too long to file. Though an extension gives you an extra six months to complete your income tax return, it’s always best to file it as soon as possible. The longer you wait, the more likely you will forget what happened during the previous tax year.

When should I file a tax extension?

The IRS doesn’t require a reason for requesting a tax extension and usually grants them without issue.

Some common reasons for filing a tax extension request are:

  • You don’t have all your tax forms and financial info yet
  • You have an emergency that prevents you from completing your return
  • You need more time to make contributions or change a retirement plan
  • You want to make elections on your return, but you won’t know which elections are best until later in the year

No matter your reason, if you need more time, just ask for it!

When shouldn’t I file a tax extension?

Since filing for an extension only gives you more time to file but not more time to pay your taxes, you shouldn’t file an extension if you cannot pay your tax bill.

If you owe money you can’t pay, an extension won’t be helpful. Instead, the IRS provides payment options and will work with you to establish a tax payment plan agreement to break up your tax bill into smaller payments over time.

If you have no tax due this year and you’re owed a refund instead, you have up to three years to file a return and claim your refund money. There is no penalty for filing a tax return late when you have no balance due, but if you’re owed a refund, make sure you file so you don’t miss out on that extra cash.

We said it before, but we’ll say it again — tax filing doesn’t get any easier as time goes on. Wait too long, and you may risk forgetting essential details about the tax year if it’s not fresh in your mind. This could mean missing out on potential deductions or tax credits.

How do I file a tax extension?

To request a filing extension on your personal taxes, you will need to use IRS Form 4868. TaxAct ® allows you to complete Form 4868 for your federal tax return and file any necessary state extension forms when you e-file. You can also print a paper copy and send it to the IRS via snail mail.

Your extension request form requires you to provide simple information about yourself, such as your name, Social Security number, and address. If any of that information has changed since the last time you filed, be sure to notify the appropriate organizations before you apply for your extension. For instance, you should notify the Social Security Administration if you changed your name. If you moved recently, you should notify with Form 8822.

How do I know how much tax to pay with my extension?

To finish Form 4868, you need to estimate how much tax you owe. The form helps you calculate this number by estimating your total tax liability for the year and subtracting any payments you’ve already made. If you choose to file a tax extension using TaxAct, our tax software helps calculate your estimated tax bill based on the information you enter.

One problem many taxpayers run into is not having all their tax information yet. If you’re still waiting on important tax documents, just try to complete your return as best you can. Rather than leaving something out, try to use estimates for any numbers you don’t have yet.

If you are using TaxAct, click Mark as Estimate for any information you need to double-check before officially filing your return. You can also use our separate Income Tax Calculator to help estimate your amount due.

When in doubt, it’s better to overpay than underpay. If you overestimated your tax bill and paid too much, you will receive a tax refund for the overpayment. However, if you underpay, you could be responsible for paying interest and penalties. The good news is that the penalty for paying late when you’ve requested an extension is significantly less than if you did not receive an extension.

What should I do after filing a federal tax extension?

The six-month extension period is often more time than most of us need.

Here are a few steps you can follow to help keep your tax return on track:

  1. Fill out your return as much as you can.
  2. Keep track of the tax items you still need by making a checklist.
  3. Keep your tax documents organized.
  4. Finish filing your tax return as soon as you can.

What about state income tax extensions?

If you live in a state that charges income tax, you’ll need to file an extension for your state taxes and your federal taxes. In most cases, a state extension gives you more time to file, not more time to pay.

Some states will grant you an automatic six-month extension if you’ve filed for a federal tax extension, but not always. When you file with TaxAct, we make it easy for you. We walk you through completing Form 4868 for your federal return and provide you with any necessary state extension forms.

Can I file a tax extension for my business?

Yes! Sole proprietors and single-member LLCs can use the same Form 4868 for individual returns.

Business owners of partnerships, multi-member LLCs, and corporations also have the option to file a tax extension for their business, though some things work a little differently. For instance, the deadline for partnerships and S corporations to request an extension was March 15.

All TaxAct offers, products and services are subject to applicable terms and conditions.
This article is for informational purposes only and not legal or financial advice.
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