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Should I Take a Tax Extension or Rush to File My Tax Forms?

Should You Take a Tax Extension or Not? Pros and Cons

I’ve taken a tax extension for our personal taxes and business taxes for several years. I’m not normally a procrastinator and usually beat my work deadlines. So what’s up with the tax extension? Following are some of our personal tax filing decision points, pros, and cons regarding whether to take a tax extension or not. Gather the data and decide which is the best approach for you this tax season.

This article may contain affiliate links which means that – at zero cost to you – I might earn a commission if you sign up or buy through the affiliate link.

Pros and Cons of Taking a Tax Extension

Should I Take a Tax Extension?


  • You have six more months to file your income tax return.
  • It’s easy to take an extension, just file IRS form 4868.
  • You don’t need a reason to file an income tax extension.
  • If you take a tax extension (and pay the amount due) instead of filing your return late, you’ll avoid fees and penalties.


  • You need to figure out how much tax you owe, even if you file an extension.
  • You must pay all taxes due by the deadline.
  • You need to understand the state and federal tax filing requirements.
  • You won’t be eligible to receive your tax refund until after you file.

Here’s my situation, each year we have at least 4 returns to oversee. Some I do on my own, others I pass on to our accountant. But even if you hire an accountant, it’s almost as difficult as completing the taxes on your own with a tax preparation program. You still need to compile all the records, organize them into a legible format and then thoroughly review the completed returns when they’re complete.

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“Should I take a tax extension or not?” – I had a lot to think about. I felt like I was busier in the spring than the summer. Sometimes my spouse and I had travel commitments in the spring. The summer just seemed more leisurely to me.  If I wanted to file my returns on time, I would need to have them to the accountant by early March, which is a lot of pressure. Also, this can be a problem if our K-1’s weren’t available in time.

Here are several reasons why you might take an extension.

 Common Reasons to Take a Tax Extension

  1. Lack the proper documentation-Did you lose or misplace your W-2 or other important tax forms? Then you might want to take an extension so that you have the filing documentation.
  2. Life happens-Maybe you had a baby, a robbery, unexpected stress or other life event that makes tax time very busy for you. You’re entitled to take the extension, so you might reduce stress by filing the IRS form 4868.
  3. Your accountant is too busy now-If you’re depending on an accountant to complete your 1040, then she probably can’t fit you in the week before the deadline. So, take an extension.
  4. You don’t need a reason-The IRS doesn’t require a reason, just a form. So if you want more time to file, just pay the amount of tax due and complete the paperwork later. 

What You Need to Know Before Taking a Tax Extension

“Can’t make the April 18 tax filing deadline and need more time to file your tax return? You can get an automatic six month extension of time to file from the IRS.”

Anyone can file form 4868 and request a six-month extension to file their taxes. For convenience, you can complete the form online, with either the IRS or on a tax prep website. This does not give you an extension to pay your taxes. If you haven’t paid the amount owed by April 18th you’ll owe interest on the balance due and maybe penalties as well. Filing for an extension circumvents the potential penalties and ‘late fee’ on the unpaid balance of 5% per month, up to 25% total.

You can file for an extension online with Turbo Tax, the IRS website, and other tax preparation software.

What if you don’t have the money you owe by April 18th? An extension isn’t going to help you with this problem. If you’re struggling to pay your taxes, the IRS has a handy guide to help. Whatever you do, don’t avoid taking action to resolve the problem, it won’t go away.

Whatever you do, don’t avoid taking action to resolve the problem, it won’t go away.

If you’re self-employed and have already set up a solo 401k or Simple-IRA, filing an extension gives you an extra 6 months to fund these retirement plans. Entrepreneurs can set up and fund a SEP-IRA for the prior year during the extension period. This extension to fund opportunity doesn’t apply to Roth or Traditional IRA’s.

Filing an extension may be helpful if you’re uncertain whether you’re eligible for a specific type of IRA. As long as you’ve funded the IRA by the April deadline, the extension allows you extra time to turn a traditional IRA into a Roth or vice versa. You may even recharacterize a Roth conversion back to a traditional IRA during the 6 month extension period.

An extension buys you time to make decisions. For the business owner, the extension gives you an additional 6 months to determine whether to depreciate equipment or take a Section 179 deduction as well as whether to carry back or forward any business losses.

Be aware that you may not be eligible to file for a tax extension if you’ve been approved for an offer in compromise. In that circumstance, you need to file by the April deadline during your five-year probationary period. If you fail to file in April, then you risk losing your offer in compromise.

Finally, taking an extension can give you more time to review your tax situation and avoid mistakes. Your accountant may be more relaxed if you take an extension. I think my accountant prefers it when we take an extension.


Is it bad to file an extension on taxes?

No, it’s not bad to file an extension. Although it is bad not to pay the tax amount due the IRS or your state, by the deadline.

What are the advantages of filing a tax extension?

You have more time to compile your records and make sure your taxes are done right.

How long is a tax extension good for?

Six months from the filing deadline.

Is it better to file an extension or an amended return?

It’s much easier to complete an extension than to file and then have to refile an amended return. If you lack the proper information or time to file a complete and accurate return by the tax deadline you’re better off filing an extension than completing an inaccurate tax return which you’ll later need to amend and refile.

The Tax Extension Takeaway

No one can answer the question for you of whether to take a tax extension or not. But, if you’re strapped for time right now, and pay the full amount of tax that you owe, then you may want to consider filing a tax extension. On the other hand, if you only have W-2 income and a small amount of investment income, then it’s quick and easy to use financial software or a free program to file your taxes now

Bonus: Resources I Use When Managing My Finances:

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Disclosure: Please note that this article may contain affiliate links which means that – at zero cost to you – I might earn a commission if you sign up or buy through the affiliate link. That said, I never recommend anything I don’t  believe is valuable.

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