Filing an Extension

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April 6, 2010

Now that we're nearing the end of tax season, it will become clearer to most people whether they'll make the April 15 deadline or not. For a variety of reasons, it's not always possible to turn your tax return in on time. Some taxpayers may not have all their documentation, they may not have time, or there may be other extenuating circumstances.

If you don't file a tax return on time, you can be subject to significant penalties. However, it's relatively easy to get an extension. Some taxpayers qualify for an extension without doing anything:

• Taxpayers outside of the country on April 15 automatically get a 2-month extension to June 15
• Taxpayers residing in certain disaster areas automatically get an extension, though this can vary by area. For taxpayers affected by recent storms and flooding, see: Massachusetts, Rhode Island, West Virginia
• Taxpayers serving in a combat zone generally get an extension of time to file

For other taxpayers, it's easy to apply for an automatic extension of time to file. Individual taxpayers file Form 4868, which can also be electronically filed through IRS Free File Programs or through your tax preparer. Businesses generally file Form 7004 or Form 8868 for non-profits. These extensions generally automatically grant a six-month extension of time to file.

However, they don't grant an extension of time to pay. On the forms taxpayers are generally required to estimate their tax liability and pay any amount they expect to owe (which will be applied against your final return, when filed). If you don't pay the amount owed, you may be subject to penalties.

One other caveat with filing an extension: generally a tax return is open for audit for three years following the due date of the return or the date actually filed; as a result, if a taxpayer files his or her return late, it lengthens any potential audit period.

If you have questions on this material or need help filing an extension, please let us know.