Tax Extensions: What You Need to Know for the 2024 Tax Year

March 7, 2025

There may come a time when your tax preparer suggests you file an extension. Do not be afraid! Requesting an extension of time to file your taxes is an effective tax strategy. There are some common misconceptions, and things that are unknown to some taxpayers, about extensions. This post will help to explain how extensions can be implemented as one of the most useful tools at a taxpayer’s disposal.

What Does an Extension Actually Do?

An extension of time to file grants a taxpayer an additional six months to file their tax return. For the 2024 tax year, if an individual files an extension by the tax deadline of 04/15/2025, their new due date for tax filing will be 10/15/2025.

What Do You Need to File an Extension?

To file an extension, you need to submit the appropriate extension form. For individuals, this is Form 4868. The form requires basic information such as your name, address, and Social Security number. Businesses use Form 7004 for extension requests, and the required information is similar.

Am I More Likely to Be Audited if I Extend?

No! Filing an extension does not increase your likelihood of being audited. The IRS treats timely-filed extensions as routine and does not penalize taxpayers for utilizing this tool.

What Does It Cost to File an Extension?

The IRS does not charge a fee to file an extension. Taxpayers can file their own extension online, by mail, or through their tax preparer. While some tax preparers may charge a small fee for filing the extension on your behalf, many offer this service at no cost.

Does an Extension Allow Additional Time to Pay My Taxes?

No. An extension only provides more time to file your return; it does not extend the time to pay your taxes. Taxes owed must still be paid by the original deadline, 04/15/2025, to avoid penalties and interest. If you anticipate owing taxes, it’s important to make an estimated payment when filing for an extension. A common strategy is to pay at least the amount you owed in the prior year or consult your tax professional for a more accurate estimate.

Why Should I Extend?

The primary reason to extend is to ensure your return is accurate. Some situations where an extension can be beneficial include:

Incomplete Information: You may be waiting on forms such as K-1s from partnerships or S-corporations.

Complex Tax Situations: If you have significant investments, multiple income streams, or other complexities, additional time allows for thorough review and planning.

Professional Availability: Your tax preparer may have more time to address your unique needs outside of the busy tax season, leading to better planning and compliance.

Extending in these scenarios reduces errors and ensures you submit a complete and accurate return, minimizing the risk of IRS scrutiny.

At the end of the day, extensions are useful but not always necessary. If you have all your information and are ready to file, doing so early is just as commendable! Contact your Larson professional today to help you calculate and file an extension.