If you need more time for your tax return, do this today or ‘miss the opportunity,’ pro warns

The federal tax deadline for most Americans is April 18, and there’s still time to file for an extension. But the clock is ticking.  

As of April 7, the IRS received more than 101 million returns, but the agency expects to receive in excess of 168 million through the end of the year.

“If you don’t file the extension by the original deadline, you miss the opportunity,” said Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida. 

Exceptions may include filers living outside of the U.S. who receive an automatic two-month extension, with a June 15 deadline, and certain members of the military may have more time, with varying extensions, Lucas said.

You may also have an automatic extension to file if you’re living in an area recently affected by natural disasters, including most of California, parts of Alabama and Georgia, among others.

There are several ways to file a federal tax extension if you can’t make the April 18 deadline. (Your state filing may need a separate extension.)

You can file Form 4868 electronically via IRS Free File, which provides free guided tax prep software. Anyone can use IRS Free File to request an extension, regardless of income, according to the IRS.

The second option is to make an electronic payment and select “extension” as the reason, which provides an automatic six-month extension without filing Form 4868, the agency says.

But the first option may bypass mistakes or confusion. “If you file Form 4868, it’s very clear that you know exactly what you’re doing,” said John Loyd, a CFP and owner at The Wealth Planner in Fort Worth, Texas. He is also an enrolled agent.

You can also print and mail Form 4868, but it must be postmarked by the federal filing deadline — and you may want to opt for certified mail for tracking.

The federal extension gives you an extra six months to file, but it’s “not an extension for payment,” warned Linda Farinola, a CFP and enrolled agent at Princeton Financial Group in Plainsboro, New Jersey.

“You still need to estimate your taxes due and make a payment online,” she said. Otherwise, you’ll rack up a late payment penalty of 0.5% of your unpaid balance per month, capped at 25%, plus interest, which currently compounds at 7% daily.

“Your saving grace would be that there is no penalty for filing a late return after the tax deadline if a refund is due,” Lucas said. However, filing an extension means you’ll have to wait longer for that payment.

If you can’t cover your estimated balance, you may be eligible for payment plans and other options through the IRS.