An extension changes your tax return due date from Apr 15 to Oct 15. In other words, it gives you six additional months to file your income tax return.
Most people view extensions with some skepticism — as if there’s something inherently bad about them — but they really are simple, and painless, and an utterly effective strategy against Apr 15 stress.
“If it’s so easy, why doesn’t everyone just file an extension?” I have no idea. There’s really no drawback. Filing an extension doesn’t mean you can’t submit your return before April 15. It just means you don’t have to.
Your tax return is not late if you’ve filed an extension by April 15th and you submit your return anytime before Oct 15.
I know I’m hammering away at that point, but that’s because people don’t seem to believe it, no matter how matter-of-fact it actually is.
Now, there is one caveat: if you owe tax (that is, if you’re not due a refund), and if you pay that tax after April 15th, then there is an interest charge that will be assessed by the IRS. Currently, this fee is in around 0.25% per month, though if you owe a lot, it can be as much as 0.75% per month. (Oregon does it a little bit differently, but I don’t want to overwhelm you with details.)
The interest is charged only on the amount that remains unpaid by April 15, so in some cases it’s a good idea to send in an estimated/extension payment before then. And it’s very simple to do that, using IRS DirectPay.
How do you file an extension (also known as a “4868” in IRS-speak)? There are a bunch of different ways, including:
- The easiest method: make a payment using IRS Direct Pay, directly from your bank account. (Choose “Extension”, and then “4868” and “2021” should auto-fill.) The IRS will automatically extend your due date to Oct 15 if you use this method. Nothing else needs to be done. The payment is the extension.
- You can instead submit a payment via credit or debit card payment using a third-party payment processor such as pay1040.com. As long as you choose to have the payment applied as an Extension/4868, the IRS will automatically extend your due date.
- I can e-file the extension for you, if you don’t want or need to submit a payment. I generally don’t charge anything for this, because it means I can set your file aside until after April 15. Less stress!
- You can mail in an extension request using IRS Form 4868. Enclose a check, if making a tax payment with your extension. Make sure it’s postmarked by April 15.
You don’t need to file a separate extension with Oregon if you’re filing one with the IRS. If you need to make an extension payment to Oregon, you can use Oregon Revenue Online to submit a payment, or you can use OR Form 40-V and check the “Original return” box. (I don’t know why “Extension” isn’t an option on that form, but … it isn’t.)