The Tax Deadline Is Approaching Fast -- Here's What to Do if You Need More Time

Tax Day in 2024 is April 15, which is rapidly approaching. And while millions of Americans have already filed their returns, received tax refunds (or paid what they owe), and moved on, there are millions of others who have not. Some are still trying to track down various tax documents. Some are trying to find receipts to back up their deductions. Others may simply not have had time to sit down and get it done.

Whatever the reason, 10% to 15% of households file a tax extension in the typical year, according to IRS data. And the good news is that doing so is a relatively quick and painless process.

Before you file a tax extension, however, there are a few things you need to know. Here's a quick rundown of the extension process, what a tax extension does (and does not do), and the other important things you should keep in mind.

How to file a tax extension

As mentioned, filing a tax extension is a quick and easy process. To file an extension, you simply submit Form 4868 to the IRS, which is a (less than) one-page form. You fill out your name and identifying information, estimate how much you owe the IRS, and answer a couple of quick questions.

The form can be mailed in, or you can use IRS Free File to submit a tax extension electronically. Most tax software providers (like TurboTax) allow you to quickly submit your extension request for free as well.

Once you've submitted your extension request, it is granted automatically. In fact, the form you use is called the "Application for Automatic Extension of Time to File U.S. Individual Income Tax Return."

What a tax extension does -- and what it doesn't do

Here's the most important thing to know (and the most common misconception) about tax extensions: A tax extension gives you an additional six months to file your tax return. It does not give you any additional time to pay what you owe.

So, this means that your 2023 tax return will be due on Oct. 15, 2024, if you file an extension before the standard tax deadline. But any money you owe the IRS will be due along with your extension or must be paid before April 15. It's still important to budget for your taxes as if you were filing in April.

Obviously, if you have not yet completed your tax return, you probably don't know the exact amount of money you owe the IRS. But it's important to use your best estimate. Even if you don't have enough money in savings to pay the full amount, it's a good idea to pay what you can. Any unpaid balance (intentional or not) will accumulate interest and penalties starting April 15.

Of course, if you anticipate a refund, this doesn't apply to you. The IRS is happy to let you wait to claim it. But if you owe the IRS money, don't make the mistake of simply sending in your extension form and not giving it another thought until October.

What about your state return?

If you don't anticipate owing the state money, your federal extension is sufficient. But if you do owe your state money (or expect that you will), you'll need to file a separate state tax extension form in most states. In some cases, simply paying the estimated amount you owe by check or online serves as the extension, meaning that no additional form is needed.

The best course of action is to check your state's department of revenue for the specifics, or your tax prep software can provide guidance when you apply for your federal extension.

The bottom line

If you ask for a tax extension, it's automatically granted, but it needs to be filed, and any estimated balance must be paid, by the standard April 15 tax deadline. With Tax Day rapidly approaching, act now if you need more time.