Have you ever had a tax deadline sneak up on you? You have your papers ready and keep reminding yourself to just fill out the returns, but suddenly it's March and then April, and you just need more time.
It happens. Nearly 13 million taxpayers requested an extension in 2014 [source: IRS]. Extensions come in handy if you need more time to get your paperwork in order, or if you want to postpone contributing money to an individual retirement account. And they're relatively easy to come by if you file before the appropriate deadline and know which form to use. Individuals and married couples file one type of form, businesses use another, and if you are living outside of the U.S., you file something completely different.
Filing an extension form doesn't cost anything if you expect a refund. If you expect to owe tax, it won't give you a payment extension. You'll have to send an estimated payment or at least a partial payment to avoid a late fee. And you'll owe interest on any balance due.
Those who live in states that tax income must file a state extension form, too. A few states offer automatic extensions. There are also automatic federal and state extensions available to individuals who live and work full-time outside of the country or those who are assigned to active combat duty outside of the U.S.
Read on to find out how tax extension forms work and how to file a federal and state income tax extension.