How to File a Tax Return Extension
The Internal Revenue Service recently announced that the due date to file your 2020 federal income tax returns has been automatically extended from April 15, 2021 until May 17, 2021! This means you do not need to complete any forms or do anything in order to get the additional 1 month extension on your federal taxes. Some states have followed suit and given the same 1 month extension but other states have not so make sure to check your state deadline.
However, with the slew of tax law changes that were enacted as part of the American Rescue Plan earlier this month, many of us are finding that we still need extra time to prepare our federal tax return. If this describes you, you can apply for an extension of time to file, which extends the tax deadline until October 15th.
The form to know is Form 4868, or the Application for Automatic Extension of Time To File U.S. Individual Income Tax Return. The deadline to file this form is the regular due date, or May 17, 2021 (normally, April 15). There are 3 different ways to request an extension and any one of these will give you another 5 months (normally, 6 months) to file your tax return:
Make a payment - Pay all or part of your estimated income taxes due either through Direct Pay, The Electronic Federal Tax Payment System (EFTPS), or using a credit or debit card. When the system asks you for the payment reason or category, just indicate that the payment is for an extension and you DO NOT need to file Form 4868.
Electronically file Form 4868 - You can file the form electronically through the IRS’s electronic filing system either by using your tax software or a tax professional. Several companies offer free e-filing of this form through the IRS Free File program. Regardless of your income, anyone filing an individual tax return can use Free File to request an automatic extension. For more information, check out www.irs.gov/FreeFile.
Paper file Form 4868 - You can file a paper form by snail mail and include any payments for taxes due.
A few final things to remember:
Just because you get an extension of time to file does not mean you get more time to pay your taxes. You still need to pay all your taxes due by May 17th (normally April 15th)! Best practice is to estimate how much you think you will owe and pay by the regular deadline. Otherwise, you may be subject to penalties and interest (and who wants to pay the government more money than they need to?).
The deadline to file and pay your state taxes vary and are not always the same as the federal deadline so you may also need to file a separate extension request for your state tax return. Some states accept the federal extension but others require their own so make sure to double check your state requirements. If you also owe any money for state taxes, make sure you also make that payment by the regular state deadline.
The IRS has previously announced that due to the February winter storms, people in Texas, Oklahoma, and Louisiana have until June 15, 2021 to file their individual tax returns and pay their taxes. The May 17th deadline has no impact on this.
As of right now, estimated tax payments for the first quarter of 2021 are still due April 15, 2021 and this has not yet been extended until May 17. Stay tuned for updates if this changes!