IRS Tax Extension
Filing on time isn’t always possible. Fortunately, the IRS grants an automatic six-month extension for most returns from individual (Form 4868) to corporate (Form 7004). But an extension to file is not an extension to pay: missing payment deadlines still triggers interest and penalties. Follow this guide to secure your extra time and avoid costly mistakes in 2025.
Relevant IRC Codes & Definitions
- IRC §6072 – Establishes due dates for returns (e.g., March 15 for calendar-year partnerships/S-Corps; April 15 for individuals).
- IRC §6081 – Authorizes extensions of time to file upon proper application.
- IRC §6651(a)(1) – Imposes late-filing penalty (5 % of unpaid tax per month, to 25 %).
- IRC §6651(a)(2) – Imposes late-payment penalty (0.5 % per month, to 25 %), plus interest under IRC §6601.
- IRC §6151 – Requires payment of tax when filing return or extension.
IRS & State Form References
| Return Type | Extension Form | Original Due Date | Extended Due Date | State Mirror? |
|---|---|---|---|---|
| Individual (Form 1040) | Form 4868 | Apr 15, 2025 | Oct 15, 2025 | Most follow federal |
| Partnership (1065) | Form 7004 (Line 1b) | Mar 15, 2025 | Sep 15, 2025 | Varies by state |
| S Corporation (1120-S) | Form 7004 (Line 1a) | Mar 15, 2025 | Sep 15, 2025 | Varies by state |
| C Corporation (1120) | Form 7004 (Line 1a) | Mar 15, 2025 | Sep 15, 2025 | Varies by state |
| Exempt Organization | Form 8868 | May 15, 2025 | Nov 15, 2025 | Usually mirror |
Real-World Example
Case Study:
BrightCode Inc. (calendar-year C Corp) and its CEO, Jane Smith (individual filer), both face tight deadlines.
- March 10, 2025: BrightCode’s audited financials are delayed; Jane’s medical expense records are incomplete.
- By Mar 15: BrightCode files Form 7004, estimates $50,000 tax, and pays $45,000 (90 %).
- By Apr 15: Jane files Form 4868, estimates $20,000 tax, and pays $18,000.
- By Sep 15 & Oct 15: Both file complete returns, pay balances due, and incur minimal interest on the unpaid amounts.
Step-by-Step Guide to Secure Your Six-Month Extension
- Identify Your Return and Deadline
- Check if you’re individual (1040), business (1120/1120-S/1065), or exempt.
- Estimate Tax Liability
- Use prior year’s data or current projections; aim to pay at least 90 % to avoid late-payment penalty.
- Complete the Extension Form
- Individuals: Form 4868 (online or paper).
- Businesses: Form 7004 (select the correct line for your entity).
- Exempt Orgs: Form 8868.
- Submit Payment
- EFTPS or credit/debit where allowed; or attach payment voucher if mailing.
- File by the Original Due Date
- File your extension form and payment by Apr 15 (individuals) or Mar 15 (most businesses).
- Confirm IRS Acceptance
- Retain electronic confirmation, IRS acknowledgment letter, or canceled check.
- Complete and File the Return
- File the full return by the extended due date Sep 15 for businesses, Oct 15 for individuals.
- Report Remaining Balance
- Pay any unpaid tax and report underpaying interest accrued.
- Check State Requirements
- Many states grant automatic extensions; confirm and file state forms if needed.
- Calendar Next Year’s Deadline
- Set alerts 30 days before deadlines to avoid repeats.
Conclusion
An extension buys you critical preparation time but does not relieve payment obligations. Timely Form 4868 or 7004 filings plus accurate estimated-tax payments keep you penalty-free and minimize interest. Master these steps to turn scramble into strategy.
Call to Action
Need help calculating estimates, filing extensions, or avoiding underpayment penalties?
Schedule your extension planning session with Anshul Goyal, CPA, and lock in your safe harbor for 2025.
Disclaimer
This guide is for informational purposes only and does not constitute legal, tax, or financial advice. Extension procedures and safe-harbor rules depend on accurate estimates and timely payments. Federal and state laws may change. Always consult a licensed CPA before filing extension forms or estimating payments.
Anshul Goyal, CPA EA FCA is a U.S. Certified Public Accountant, IRS-authorized Enrolled Agent, and Chartered Accountant from India. He specializes in extension planning, penalty avoidance, and comprehensive tax compliance for individuals and businesses.
FAQs (Top 5 High-Searched)
1. Is extension to file an extension to pay?
No taxes are still due by the original deadline.
2. What if I underpay my estimate?
Late-payment penalties (0.5 % per month) and interest apply to the unpaid balance.
3. Can I e-file Form 4868 or 7004?
Yes. Most tax-software and the IRS online portal support these forms.
4. Do states automatically follow federal extensions?
Many do, but confirm with each state’s tax authority and file state extension forms if required.
5. What if I miss the extension filing?
You face late-filing penalties (5 % per month, up to 25 %) plus interest file immediately to minimize costs.
About Our CPA
Anshul Goyal, CPA EA FCA has guided over 2,000 individuals and corporations through IRS extensions, saving clients millions in penalties and interest. His firm offers end-to-end extension and tax-payment planning for 2025.