Request for Extension of Time to File

The key point that the taxpayer must understand is that any tax liability (which will have to be estimated) must be paid to the IRS and/or CA by the April filing deadline, otherwise interest and/or a penalty will accrue. Filing an extension does not avoid penalties for underpayment of taxes.

There is little point in filing an extension if no payment is going to be made with the extension request: if the taxpayer owes money when (finally) filing, but does not pay anything with the extension, then the IRS is likely to treat the matter as a late filing, disregarding the extension request. And if the taxpayer in fact owes no money or is getting a refund, there is no value in filing an extension request because a taxpayer in that situation isn’t subject to a late filing penalty.

An automatic six-month extension of time to file a federal return is available for most taxpayers. There are five different ways do this.

By making an online payment and selecting “Extension” and/or “Form 4868” as the reason for the payment, or where the payment is to be applied. There are two online payment options:

Payment from a bank account (EFT), at irs.gov/payments/direct-pay
Payment by a checking or debit card, at irs.gov/payments/pay-taxes-by-credit-or-debit-card

Processing fees are charged (and paid to third parties). For credit cards, the fee is approximately 2% of the payment; the exact fee varies by processing company.

Filing Form 4868 by phone (888-972-9829, 888-729-1040, or 888-872-9829), which requires making a payment by credit card or other electronic method
On IRS.gov, using Free File software, regardless of income
By printing and mailing Form 4868, with a check
Through TaxSlayer, with approval of the LC

Form 4868 should be e-filed only if the taxpayer is expected to come back to have their full tax return filed by Tax-Aide.

If the taxpayer won’t be back to do the full return, then it is much quicker to help the taxpayer use the direct payment option at irs.gov (see above), if wanting to pay by direct debit, or to use a paper Form 4868, if paying by check.

Enter name and address information in the Basic Information section.
Don’t enter information in the Federal or State sections unless the site is open after the April filing deadline, and the taxpayer will return to the site to complete the return.
Go to Form 4868 - Application for Extension [Federal Section > Miscellaneous Forms > Application for Extension].
Fill in the requested dollar amounts.

“Tax Liability” is an estimate of the amount that will be on Line 24, Total Tax, of Form 1040, when filed. (Use Line 24 of the prior year’s tax return, if available, as a starting point.}
“Tax Payments” is an estimate of the amount that will be on Line 25d plus Line 26 of Form 1040, when filed, not including the amount of Line 9 of Schedule 3 (the amount being paid with the request for extension). As a starting point, total the amount of federal taxes withheld on available taxpayer documents, plus federal estimated tax payments made.

Check the box “I was out of the country” if the taxpayer expects to be out of the country on the regular due date of the return.
After entering a dollar amount for “Amount Paid with Extension”, tab – do not click “Go to Extension Payment” or “Continue”. TaxSlayer will display the question “Would you like to pay your balance due electronically?”

If you check the box, to indicate “Yes”, TaxSlayer will extend the page so that bank information can be entered.
If you don’t check the box, the taxpayer will be paying by check. [If paying with a credit or a debit card, Form 4868 should not be prepared through TaxSlayer, as discussed above.]
Click “Continue.”

If the taxpayer is paying by direct debit, the request for extension should be e-filed. (If paying by check, do not e-file.)

Go to the E-file section.
The Application for Extension Found page will appear. Click “File Extension.”
The Submit Extension page will appear. Click “I Understand” and then “Continue.”
On the Review page, enter any five-digit number for the taxpayer (and, if MFJ, do similar for the spouse), then click “Continue.”
You’ll see a page saying that the extension request has been submitted; click “Continue” to complete the process.

If the taxpayer is going to pay by check, a printed copy of the Form 4868 should be mailed with the check. The form can be printed by generating a standard PDF for the return, then printing just the Form 4868 page.

Printing any pages of the return for the taxpayer, other than the Form 4868 page, assuming that information from tax documents has been entered in TaxSlayer (to make an informed estimate of the amount owed), is not recommended: the return is not complete and will not be filed. Printing of pages may lead the taxpayer to believe that the return was in fact filed by Tax-Aide.

If you do print any pages, “DRAFT” should be written on each page to make clear that the return won’t be filed by Tax-Aide.

IMPORTANT: Regardless of how the request for an extension is made, inform the taxpayer that their federal and state tax returns must be complete and filed by October 15 to avoid penalties for late filing. If there are any Tax-Aide sites in your district, or a nearby district, that will be operating after the April filing deadline, or any VITA sites, provide that information to the taxpayer.
Note for CA state returns: CA grants an automatic extension of time to file provided that the tax is paid in full by the due date.

No form is needed if the taxpayer does not expect to owe any money when the CA return is filed.
If a payment will be mailed to the FTB, CA Form 3519 is the voucher that should accompany the payment.
Extension payments can also be made online: go to FTB.ca.gov/Payment options.
(“Web pay” is a withdrawal from a checking or savings account; the other option is to pay by credit card, with a 2.3% service fee.)