What's the Difference Between a Tax Extension and Filing Late?

A tax extension and filing late might sound similar, but they have very different consequences. A tax extension, requested by filing Form 4868 by the April deadline, gives you an extra six months to file your return without facing failure-to-file penalties. However, an extension to file is not an extension to pay — if you owe taxes, you still need to pay an estimate of what you owe by the original deadline to avoid penalties and interest. Filing late without an extension is a different situation, and the IRS will charge a failure-to-file penalty of 5% of the unpaid tax per month, up to 25%. If you need more time to gather your documents, always request an extension rather than simply missing the deadline.