Should You File a Tax Extension? Pros, Cons, How to Do It

With the April 15, 2025 📅, tax deadline fast approaching, many taxpayers are wondering: Should I file a tax extension? Whether you’re running out of time, missing important documents, or just overwhelmed, filing an extension might be the right move, but only if you understand what it does and what it doesn’t.

In this post, we’ll check the pros and cons of filing a tax extension, how to do it properly, and common mistakes to avoid.

What Is a Tax Extension?

A tax extension gives you an extra six months to file your federal income tax return. For 2024 taxes, that means the new deadline becomes October 15, 2025, instead of April 15.

However, it does NOT extend your time to pay taxes owed. Any unpaid taxes are still due on April 15. If you don’t pay by then, you may owe interest and penalties, even if you get an extension.

Pros of Filing a Tax Extension

• 🕒 More Time to Gather Documents
  • If you’re still waiting for K-1s, corrected 1099s, or business records, an extension gives you breathing room to file accurately.
• 🚫 Avoid Late Filing Penalties
  • The failure-to-file penalty is 5% of the unpaid tax per month, up to 25%. Filing an extension avoids this, even if you owe money.
• 💼 Better Accuracy = Lower Audit Risk
  • Rushing often leads to mistakes. Taking more time allows you to double-check deductions, report income accurately, and minimize the chance of an audit.
• 📋 Time to Fund an IRA or HSA (if self-employed)
  • Some retirement contributions (like SEP IRAs) can still be made before the extended filing date and count for the 2024 tax year.

Cons of Filing a Tax Extension

• ⏰ You Still Have to Pay Now
  • If you owe taxes, you must estimate and pay them by April 15 to avoid late payment penalties and interest.
• ⚠️ Penalties Still Apply If You Don’t Pay Enough
  • If your estimated payment is too low, the IRS may charge interest and late payment penalties on the unpaid balance.
• 📉 Delayed Refund
  • If you’re expecting a refund, filing later simply means you get your money later potentially months down the road.

How to File a Tax Extension (Step-by-Step)

📝 Step 1: Estimate What You Owe

Use your current income, deductions, and tax credits to estimate your total 2024 tax liability. Subtract any payments you’ve already made (via withholding or estimated taxes).

💻 Step 2: File IRS Form 4868

You can file Form 4868 electronically via:

• IRS Free File: https://www.irs.gov/freefile
• Your tax software (TurboTax, H&R Block, etc.)
• Through your tax preparer Or mail a paper version to the IRS (must be postmarked by April 15).

💵 Step 3: Pay What You Owe

You can make an estimated payment with your extension online at IRS Direct Pay or by check.

What Happens After You File?

If accepted, your new filing deadline becomes October 15, 2025. There’s no need to wait until then you can file your return anytime during the extension period.

💡 Tip: Even with an extension, consider filing as soon as possible, especially if you’re due a refund.

Common Mistakes to Avoid

• Assuming you don’t need to pay anything until October
• Not filing Form 4868 at all (failure to file = 5% penalty/month!)
• Forgetting state tax deadlines — most states mirror the federal deadline, but some require separate extension forms

Filing a tax extension can be a smart move if you need more time, but only if you estimate and pay your taxes now. It’s a tool for filing accuracy, not a way to delay payment.

If you’re unsure how much you owe, working with a tax professional or using online calculators can help you avoid unnecessary penalties.

✅ Need more time? File Form 4868 today — and pay what you can.

🔗 Helpful Links:

• Download IRS Form 4868 (PDF)
• File an Extension Online (IRS Free File)
• Make a Payment via IRS Direct Pay
• Top 10 Tax Deductions That Could Save You Thousands in 2025
• How to Maximize Tax Benefits If You’re Self-Employed
• Who Qualifies Child Tax Credit(CTC) & Earned Income Tax Credit (EITC) in 2025?
• Tax Deadline 2025: Everything You Need to Know to File on Time
• Maximize Your Tax Refund: Last-Minute Filing Tips for 2025