An extension provides you with an extra 6 months to file your personal income tax returns.
In fact, the April 15th “deadline” should really be thought of not as the filing deadline, but as the payment and extension deadline. The real filing deadline is 6 months later, October 15th, assuming you’ve filed an extension prior to April 15th.
We in the tax-world tend to use the phrase “apply for an extension”, but there’s really no application process; you simply file an extension using one of the methods below. Acceptance is automatic, as long as it’s filed before April 15th and you’ve provided accurate identifying information. I’ve never seen the IRS deny an extension unless it’s filed after the deadline, or an incorrect SSN is used, or something like that.
There are a few different ways to file an extension:
- You can mail in an extension request using IRS Form 4868 (see here). Enclose a check, if making a tax payment with your extension. (Why would you need to make a payment? See below.)
- You can make a payment directly from your bank account using IRS Direct Pay (see here – choose “4868” in the “Apply Payment To” box). You don’t need to file a separate 4868 if you use this method.
- Similarly, no 4868 is required if you submit a credit- or debit-card payment, and indicate it as an extension payment. See, for example, www.pay1040.com.
- Oregon recognizes the federal extension, so you don’t need to file an extension with Oregon if you’re filing one with the IRS. If you need to make an extension payment to Oregon, use Form 40-V (here) and check the “Extension” box.
**Please note that filing an extension extends the filing deadline but not the payment deadline.** That is, your payment for any tax that you end up owing when you do file your return is due on April 15th. After April 15th, it’s officially late. This puts a lot of people in a bit of a bind, since they won’t know if or how much they owe until they file their tax return. The only advice I can give is to pay in however much you think you might owe. If you send in too much, you’ll get the extra amount back as a refund after you file your returns, unless the IRS or Oregon hold onto it to pay down a different debt.
If you don’t think you’ll owe anything, i.e. if you think you’ll be getting refunds, then there’s no requirement to send in any payment with your extension filing. There’s no penalty or fee for late payments if no payment is due!
If you do end up owing tax, and you haven’t paid it by April 15th, then late-payment penalties and interest begin to accrue on April 16th. These amount to roughly 0.75%-per-month for the IRS and 5%-flat-plus-0.5%-per-month for Oregon, applied to however much you owe. But as long as you file by October 15th, you won’t be charged any additional penalties for late-filing.