As the April 15 tax deadline approaches, many taxpayers find themselves facing the same question:
Should I go ahead and file, or should I request an extension?
While it may seem like a simple choice between now or later, the decision can actually affect your refund timing, penalty exposure, and peace of mind. Let’s break down the pros and cons of each, and how to decide what’s right for you.
Why Filing Early Might Be the Best Move
Filing your tax return early is often the most proactive and beneficial approach—especially if your tax documents are in order. Here’s why:
1. You’ll Get Your Refund Sooner
If you’re due a refund, the earlier you file, the sooner the IRS will process it. Electronic filing with direct deposit is the fastest route.
2. You’ll Avoid the Last-Minute Rush
Waiting until April puts you at the mercy of overloaded systems, rushed decisions, and longer CPA response times.
3. You’ll Prevent Identity Theft
Tax-related identity theft is more common than you think. If someone else files a fraudulent return using your Social Security number, it could take months to resolve. Filing early protects your identity.
4. Time to Address Surprises
If you unexpectedly owe taxes, filing early gives you more time to plan and budget for your payment—even if you don’t submit payment until April 15.
When It Might Make Sense to File an Extension
An extension gives you until October 15 to submit your return, but it doesn’t extend the time to pay what you owe.
So when does it make sense?
1. You’re Still Waiting on Documents
If you’re missing key forms (like a K-1, amended 1099, or W-2), filing an extension may help you avoid filing an incomplete or inaccurate return.
2. Major Life Changes or Events
Moving, business transitions, a new dependent, or complicated investment activity? Extra time could lead to a more accurate and optimized filing.
3. You Want to Maximize Deductions
An extension gives business owners and self-employed professionals more time to evaluate deductions and potentially fund retirement plans like SEP IRAs.
4. You’re Facing Personal Challenges
Sometimes life happens—family emergencies, health issues, or business disruptions can prevent you from filing on time. An extension is a valuable backup.
What an Extension Does NOT Do
Let’s be clear:
An extension does NOT give you more time to pay.
If you owe taxes and don’t pay by April 15, interest and penalties begin accruing—even if you file an extension.
Estimate what you owe and submit payment with your extension to avoid late fees.
How to File for an Extension
You (or your CPA) can file Form 4868 with the IRS to request an automatic 6-month extension.
- It takes minutes to file electronically
- No explanation is needed
- Available to individuals and self-employed taxpayers
But don’t wait until the last second. Filing an extension last-minute may not give you time to calculate and pay your estimated tax properly.
Here’s a quick decision guide:
Have all documents and ready to go Expecting a refund Owe taxes but want time to save/pay Missing forms or awaiting corrections Experienced major life or financial events Can’t file on time and need more prep time
- File early
- File early
- File now, pay by 4/15
- Consider an extension
- Consider an extension
- File an extension
