Does a Tax Filing Extension Give You More Time to Pay?
Filing your tax return can feel a bit overwhelming, especially if you are unprepared (or unable) to pay your tax bill. Many taxpayers consider requesting a filing extension, hoping it will give them more time to come up with the funds. But does a tax filing extension give you more time to pay your taxes? The answer might surprise you – and understanding the nuances may save you from costly penalties and interest.
Key Takeaways
A tax filing extension does not give you more time to pay. It only extends your deadline to file your return. Your payment is still due by the original tax deadline.
Penalties and interest still apply if you don’t pay on time. Even with an extension or payment plan, the IRS will continue to charge interest and failure-to-pay penalties until your balance is paid.
You still have options if you can’t pay your taxes. Payment plans, short-term extensions, hardship status, and even settlement programs may help you manage or reduce your tax debt.
Does an Extension Give You More Time to Pay?
The short answer to this question is no, a filing extension will not give you more time to pay your taxes. It only gives you additional time to file your return. You’ll still be expected to pay your tax bill in full by the original filing deadline (typically April 15). If you don’t pay on time, IRS penalties and interest fees will start accruing on the unpaid balance.
What is a Tax Filing Extension?
As we stated earlier, a tax filing extension gives you more time (typically 6 months) to submit your tax return.
What an Extension Does:
- Gives an additional 6 months to file your return
- Help you avoid a failure-to-file penalty fee
What an Extension Won’t Do:
- Give you more time to pay your tax bill
- Prevent interest from accruing on unpaid taxes
- Eliminate the failure-to-pay penalty fee
When the IRS May Allow More Time to Pay
Although a filing extension does not give you additional time to pay your taxes, the IRS may allow more time under certain circumstances.
Short-Term Payment Extension
A short-term payment extension, also known as a short-term payment plan, gives you up to 180 days to pay your tax balance in full. You must owe less than $100,000 and can apply online or by phone.
It’s important to note that although you get additional time to pay, penalties and interest fees will continue to accrue until your balance is paid in full.
Disaster Relief
The IRS gives automatic filing and payment extensions to those living in federally declared disaster areas. The extension time varies by disaster, so you’ll need to visit the IRS website to see information regarding your specific situation.
Military Extensions
U.S. Military personnel and civilian workers in a military combat zone may receive an additional 180 days to file and pay their taxes. Additionally, no penalties or interest fees accrue during this time.
Active-duty members stationed abroad (non-combat area) may request a two-month extension to file and pay, but interest will accrue.
Can’t Pay Your Taxes? Consider These Options
If you can’t pay your tax bill by the deadline date and don’t qualify for any of the automatic payment extensions, you still have options.
File & Pay What You Can
To avoid paying more penalty and interest fees than you need to, always file on time (or request an extension) and pay as much as you can by the original filing deadline. Be sure to request a short-term payment extension or a longer payment plan for any remaining balance.
Set Up a Payment Plan
If you realize that your tax balance is more than you can afford to pay, set up a payment plan online, by mail (Form 9465), or by phone (800-829-1040). Short-term plans give you up to 6 months to pay in full. Long-term plans give you up to 72 months to pay off your tax balance.
Although you are still charged penalty and interest fees, it will be at a reduced rate.
Request Hardship Relief (CNC Status)
In cases where you are unable to make any payments at all, due to financial hardship, the IRS may temporarily suspend your required tax payments and put you in a Currently Not Collectible (CNC) status. Under CNC status, your debt is not cancelled or forgiven, and penalties and interest continue to accrue.
Before the IRS grants your hardship request, you’ll need to complete a Collection Information Statement (Form 433-F or 433-A) and provide supporting documentation. You will also need to recertify your hardship status annually.
Submit an Offer in Compromise
In rare situations, you may be able to settle your tax for less than you owe through an Offer in Compromise (OIC). If the IRS approves your settlement offer, you’ll need to either pay the balance in full within 5 months (lump sum) or make periodic payments over several months or years. To learn more about an OIC, see Form 656-B, Offer in Compromise Booklet.
Talk to a Tax Professional
Not sure which option is right for you? Consider speaking with a tax professional. They can review your case and determine which programs are best suited to your financial situation. A tax professional can also represent you before the IRS and ensure you are not paying more than required. For a free consultation, contact Top Dog Tax Relief at 855-753-3569.