The Internal Revenue Service requires an electronic or paper form 4868 if you need an extension and have taxes due. If the IRS owes you a refund, an extension form is not required. However, filing the proper extension form will benefit you if there is any chance your calculations are incorrect and you might owe the IRS money.
Potential Penalties
If you fail to file on time or request a late filing extension, the IRS will charge you a late filing penalty of 5 percent of your taxes owed. You will also be charged 1/2 percent of any amount due each month you are late as interest on the late payment, although the late payment penalty is reduced for any month you pay interest so the total never exceeds 5 percent. If you miscalculated on your tax returns and the IRS determines that you owe them money, you will be responsible for these fees.
Late Refund Limitations
With rare exceptions, the IRS will pay your tax refund if you file within three years of the original tax due date. You will not earn interest on the refund money, so unless you have good reason for not filing on time, you will benefit from getting your refund as soon as possible so you can place it in a savings account and earn interest on it yourself.
Automatic Extensions And Reasonable Cause
Certain circumstances entitle you to an automatic two-month filing extension, whether you owe taxes or are receiving a refund. This includes taxpayers who are living outside the U.S. at the tax due date and active military personnel. You can also dispute late filing fees after they are charged if you can prove that you were unable to file on time and did not willfully neglect to file your tax return.
Considerations
IRS guidelines do not necessarily apply to all state tax agencies. Check with your state's Department of Revenue to find out if you will owe penalties for filing state taxes late, even if a refund is due. Check with the state and federal agencies each year if the situation applies, as tax laws change on a regular basis.
