8 Reasons Filing a Tax Extension Makes Sense

Filing your taxes can be stressful, especially if you have a hectic schedule. Worrying about whether you’ll have all the necessary information to file makes it even tougher. If you aren’t sure you’ll be ready by the April 15 deadline, you may be able to request a tax extension. 

What is a tax extension? 

A tax extension is exactly what it sounds like — a request for more time to file your taxes. For 2025, an extension will give you an extra six months to file your taxes, making your new deadline October 15, 2025. You have until April 15 to submit an extension request for the 2025 tax season. 

If you’re an American citizen living abroad, your filing deadline is June 16. As such, if you request a tax extension by June 16, your filing deadline will be extended by four months to October 16. 

While an extension gives you more time to file your taxes, it doesn’t give you more time to pay money already owed to the IRS. If you have a tax bill that’s due by April 15, that’s when the bill is due, regardless of a tax extension. If necessary, you can set up a payment plan and repay your tax bill in monthly installments. 

When filing a tax extension makes sense 

Anyone is eligible to file a tax extension regardless of income level. However, just because you can file an extension doesn’t mean you should. Here are eight good reasons when filing a tax extension makes sense. 

1. You need more time 

Some people simply run out of time. Whether you forgot to file or you’ve had too much going on in life, filing a tax extension could be an option. 

2. You don’t have all the necessary documents 

Not having the required tax documents is perhaps the most common reason for requesting an extension. As a general rule, companies and employers have until the last day of January to send you your tax documents from the previous year — but things happen. Maybe a form got lost in the mail, or maybe you simply misplaced it. 

Whatever the reason, filing a tax extension may be necessary. 

3. Inaccurate tax information 

Another common issue is inaccurate information on one of your tax forms. This is especially true for people who have changed addresses or names in the past year. It’s also possible that the income on your W-2 is incorrect and your employer has to issue a new one. 

4. Unexpected life events 

Even the IRS understands that life can sometimes get in the way of your tax filing plans. From an unexpected medical diagnosis or accident to the death of a loved one, unexpected life events can put your taxes on the back burner. If this is the case, you have good reason to file for a tax extension. 

5. You will be traveling 

There are special extensions for U.S. citizens living abroad, but you can also file for a tax extension if you’re simply traveling and won’t be home by April 15. 

6. Tax elections 

If you are self-employed or own a business, you may want to make tax elections on your return. However, depending on your revenue stream, you may not know which elections to make until after Tax Day. Filing a tax extension will give you more time to make the right elections to benefit your business. 

7. Retirement funding strategies 

Depending on the circumstances, you might request an extension so you can contribute more to a retirement account. Most contributions must be made by December 31 to be deductible on that year’s taxes, but you can make contributions to SEP IRAs and individual accounts until Tax Day. Filing an extension could allow you to contribute more and possibly increase the size of your refund. 

8. You were affected by a natural disaster 

Millions of Americans were affected by Hurricanes Helene, Milton, and Debby in 2024. Thankfully, the federal government is understanding of this fact and has offered special tax extensions to anyone living in an area affected by these hurricanes. 

Rather than having to file by April 15, individuals and businesses in disaster relief areas have until May 1 to file their taxes and make payments to the IRS. If you still need more time, you can file for an additional tax extension if you live in a federally declared disaster area. 

How to get a tax filing extension 

To extend your tax filing deadline, you’ll need to fill out Form 4868. It will ask you for your name, address, Social Security number, an estimate of how much taxes you owe, and what you have already paid. 

There are several ways to complete Form 4868: 

• Visit Free File on IRS.gov and fill out the form online. 
• Use your tax software and receive step-by-step instructions that will guide you through the process. 
• Ask your tax preparer to file an extension for you. 
• Print out the form and mail it to the IRS. 

To get the extension, the IRS requires that you estimate your tax liability on the form, and you should also pay any amount due. Ensure you file your tax extension by the same day your tax return is due. For 2025, that means filing for the extension by April 15. 

Does a tax filing extension cost money? 

The nice thing about filing a tax extension is that it’s free! You can file a free tax extension online, on paper, or through your tax preparer by filling out and submitting Form 4868. 

What is the penalty to file late taxes? 

While requesting an extension is free, filing your taxes late or not paying your taxes is not. If you don’t file for an extension in time and fail to file or pay your taxes, you’ll face penalties and fees. The penalty starts at 5% of your unpaid taxes and increases up to 25% each month. 

Rather than not file your taxes in time because you can’t afford to pay them, you can sign up for a payment plan with the IRS. Payment extensions of 60 to 120 days are also available upon request. 

If you don't have the money on hand to pay your taxes, you could apply for a tax refund advance loan. These types of loans can give you enough money to pay the IRS and avoid unwanted penalties. You can then repay the loan in a lump sum or through monthly installments.