Understanding tax filing deadlines and extension options

Are you ready for the April 15th tax filing deadline? If not, we explain how filers can seek a six-month extension.

Tax season deadlines can be a stressful time, especially when you feel unable to complete your tax return on time. This article provides a guide you can rely on to effectively navigate your tax filing responsibilities.

Federal tax deadlines

Individual annual income tax returns are generally filed on a Form 1040, and the usual deadline for filing these federal income tax returns is April 15th of the year following the tax year (for example, 2024 taxes are due April 15, 2025). If, however, this due date falls on a weekend or a legal holiday, the deadline is extended to the next business day. Even state-specific holidays, such as Patriots’ Day in Massachusetts, can affect the federal filing deadline. Further, if there is a federal or DC holiday, such as Emancipation Day, on the 15th (or the next business day after), the nationwide deadline is extended to the next possible day.

For paper filers, the IRS considers a tax return timely if it is correctly addressed, has sufficient postage, and is mailed and postmarked by the due date. For electronic filers, the deadline is 11:59 p.m. local time on the due date.

Automatically extended federal tax deadlines

Certain individuals may qualify for an extended deadline to file and pay federal taxes, particularly those affected by natural disasters. This year, several extensions apply across different regions:

For example, individual taxpayers in Alabama, Florida, Georgia, North Carolina, South Carolina, and select counties in Alaska, New Mexico, Tennessee, and Virginia have until May 1, 2025, to file and pay their 2024 taxes.

State income tax deadlines

State income tax deadlines typically follow the same schedule as the federal tax deadline, though some exceptions apply. For instance, Hawaii sets its state income tax deadline on April 21, while Delaware and Iowa have deadlines on April 30. Virginia’s deadline is May 1, and Louisiana extends the filing deadline to May 15.

Nine stdlinesates—Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming—do not have a state-level income tax. As a result, residents of these states are generally only required to file federal tax returns. However, individuals in Washington or New Hampshire who have significant capital gains or investment income may still need to file a state tax return.

What if you can’t file your taxes on time?

If you owe taxes to the IRS and fail to file on time or obtain an extension, additional penalties and interest will begin to accrue. To minimize these charges, the IRS advises that you pay an estimated amount of what you owe as soon as possible, you can even set up a payment plan.

If you are unable to file your taxes by the federal tax deadline, you can request a six-month extension. It is crucial to understand that this extension only applies to the time to file, not the time to pay any taxes owed. You must still pay your tax liability by the original April deadline.

How to file a tax extension

To file for an extension, you will need to complete and return IRS Form 4868. The extension is automatically granted if you have paid your estimated tax liability in full by the April payment deadline. If you have not paid 100% of your tax liability, however, the IRS may reject your extension request, leading to penalties and mandatory interest on the unpaid amount that cannot be waived. Failure-to-file penalties are calculated based on the unpaid amount and predetermined interest rates, accruing daily.

Reasons for filing an extension

There are several reasons why filers might need an extension:

• Incomplete reporting: Some types of investments, including partnerships, hedge funds, or venture capital, frequently take longer to prepare reporting, which can delay the necessary tax documentation.

• Illness or travel: Being out of the country or dealing with a significant illness may necessitate an extension.

• Federal or state emergencies: Events like natural disasters, such as the California wildfires, or public health emergencies can extend filing deadlines.

• Lack of planning: Sometimes, individuals simply aren’t prepared to file by the deadline.

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Do tax filing extensions increase audit risk?

While anecdotal evidence suggests that more complex federal tax returns (which often require extensions) might be scrutinized more closely, officially, filing an extension does not inherently increase your chances of being audited. The IRS typically flags returns for audit based on significant changes in year-over-year data, such as a substantial increase in charitable donations or other deductions, rather than filing timeframes.

Special considerations for late filers

Estimated Tax Payments

If you are required to make estimated tax payments throughout the year, filing an extension can complicate this process. Estimated payments are typically due quarterly in April, June, October, and January. These payments can be based on either your current year’s tax liability or 110% of your previous year’s tax liability. If you haven’t finalized your tax return, estimating these payments accurately can be challenging.

Overpayments and Future Tax Estimates

If you overpay your estimated taxes and want to apply the overpayment to the next year’s tax liability, ensure that this is clearly indicated when you file your tax return. The IRS will consider the overpayment as received on April 15th if it is applied to the following year’s estimates, which can be beneficial for managing your estimated tax obligations.

Foreign Accounts or Holdings

Individuals with foreign accounts or holdings must also file documentation through FinCEN, which are due at the same time as your individual tax return. An extension for your tax return will typically also extend the deadlines for these filings.

Loan Applications

Filing an income tax return extension can complicate borrowing processes, such as applying for student loans or mortgages. Lenders often require your most recent tax returns, and an extension might delay these applications. Communicating with your lender or financial advisor is essential to managing these situations effectively.

Effectively managing your tax obligations

These rules cover the tax filing and extension deadlines for most individuals, but some circumstances may further affect your payment and filing deadlines—for example, living permanently overseas or, as we already noted, a federally declared disaster in your home state. Because of this, you should always confirm any decisions with a tax professional, especially if you feel your tax filings are complicated by special circumstances.

Understanding the intricacies of tax filing deadlines and extensions can help avoid unnecessary penalties and interest. Whether due to incomplete reporting or unforeseen circumstances, knowing how to file an extension and manage your tax obligations effectively is crucial, and consulting with a tax professional can help ensure that you are meeting all requirements and making the best financial decisions for your situation.

Nixon Peabody Trust Company provides personalized advice and strategies to help you navigate these challenges, from fiduciary services and investment management to estate planning. We’re here to help you stay calm during tax season so get in touch today!

Benjamin Kuehn
Trust Advisor
+1 617.345.6038
bkuehn@nixonpeabody.com