The information in this article is up to date for tax year 2024 (taxes filed in 2025).
If you have clients that need to take advantage of filing a tax extension this year, your TaxSlayer Pro software makes it easy to file Form 4868 and ensure your clients get the extra time they need. Here’s what you should know to help them file on time and avoid late penalties.
How late can you request a tax extension for your client?
Forms for filing extensions are due on the tax filing deadline. This date typically falls on April 15th, but circumstances like federally declared natural disasters can push it back.
Which clients qualify for an automatic tax extension?
In some cases, your clients may have additional time to file – no extension required.
For instance, your clients may receive an extension if they reside in areas impacted by a federally declared natural disaster. In that case, the IRS automatically grants a filing extension and payment relief for those affected.
U.S. citizens or resident aliens living abroad automatically receive a two-month extension (until June 15th) to file their tax returns and pay any taxes owed. This applies if they are either in military service outside the U.S. and Puerto Rico or living outside the U.S. and Puerto Rico with their main job or duty station there.
Does filing a tax extension help my clients avoid late fees?
Yes, but not all late fees. The IRS imposes late fees both for late filing and for late payment. Filing for a tax extension will help your clients avoid late filing fees if they file by the extended deadline of October 15th. However, filing for an extension won’t help them avoid penalties for late payment if they owe taxes and fail to pay once they file. If they don’t owe anything or are due a refund, they won’t face any late payment penalties.
What is the new filing deadline for clients who received an extension?
The extended tax filing deadline is October 15th, but it’s usually in their best interest to file as soon as possible. Even though they will not accrue fees for late filing during this time, they could still be accruing fees if they have an outstanding tax payment.
How do I file taxes for clients with a filing extension?
File your client’s taxes just as you usually would in your TaxSlayer Pro software (Desktop Extension Filing Instructions vs. Pro Web Extension Filing Instructions). If their Form 4868 was electronically filed or postmarked by the tax filing deadline, they won’t face late filing penalties. However, keep in mind that while filing an extension allows your clients extra time to submit their return, it does not extend the time to pay any taxes owed.
Note: These penalties won’t be reflected when you file their taxes in your TaxSlayer Pro software. They’ll receive a notice from the IRS later concerning any late payment penalties.
What if my client didn’t file for an extension but still has not filed?
If your client didn’t file for an extension and has still not submitted their tax return, they face late penalties for every month they don’t file. It’s important for your client to file as soon as possible, even if they cannot pay the full amount owed.
What is First Time Penalty Abatement?
Whether your client faced a late payment or late filing penalty, if it’s their first time to incur a penalty from the IRS, they may qualify for First Time Penalty Abatement to help reduce or remove the cost of the fine. The First Time Penalty Abatement is available to taxpayers who meet at least one of the following criteria:
- Didn’t previously have to file a return or have no penalties for the 3 tax years prior to the tax year in which they received a penalty
- Filed all currently required returns or filed an extension of time to file
- Have paid, or arranged to pay, any tax due
If you think your client may qualify, advise them to call the number on their IRS notice to ask if they are eligible and learn the next steps. If you have representation rights before the IRS, you can assist your client in making this call or make the call on their behalf.
Guiding clients through the tax return extension process
Tax preparers play a crucial role in helping clients determine when an extension is necessary and applying for an extension in a timely manner. It’s essential to communicate the specific deadlines for filing an extension, which typically falls on the original tax return due date. Make sure your clients know that while an extension allows additional time to file the return—usually six months—it does not extend the deadline for payment, meaning any taxes owed are still due by the original date to avoid penalties. And be sure to explain the potential consequences of failing to file both on time and on the extended deadline, which can include late filing penalties and interest on unpaid taxes.
