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Smart Money

Should I File a Tax Extension?

Not ready to file your taxes by Tax Day? Learn how to file a tax extension and if this option is right for you.

Jamie Cattanach • April 13, 2022

Psst: Remember New Year’s? That champagne-filled, party-popping celebration was somehow already four whole months ago – which might sound bonkers until you go looking for that long-discarded list of resolutions. (Don’t worry, it happens to the best of us.)

And now that the frost has melted and spring is in the air, there’s another big day to mark on your calendar. April brings more than showers and flowers: it brings Tax Day with it, too.

Given how quickly time can evaporate while we’re busy living our day-to-day lives, you may be caught short by the looming tax deadline. If so, here’s some good news: there’s such a thing as a tax extension, and you can file for one if you need more time to get your stuff together. The important catch: an extension only gives you more time to file your taxes, not to pay them. 

Here’s what you need to know.

In This Article

  1. What is the deadline to file taxes in 2022?
  2. What is a tax extension?
  3. How to file a tax extension
  4. Reasons to file a tax extension
  5. Filing a tax extension: what to watch out for
  6. Should I file a tax extension?
  7. FAQs
  8. Conclusion

What is the deadline to file taxes in 2022?

Heads up: the deadline to file taxes this year is just a few days away, falling on Monday, April 18, 2022, per the IRS website. 

That date shouldn’t be too surprising – Tax Day traditionally falls smack-dab in the middle of the month on April 15 and has only been moved back because of the Emancipation Day holiday. 

Bonus: Taxpayers who live in Maine and Massachusetts will have one extra day, with a deadline of April 19, 2022, thanks to the Patriots’ Day holiday those states celebrate. 

But many of us enjoyed the breathing room we had to file our taxes over the last two years. Due to the pandemic, the federal government moved back the tax deadline from its normal April position to July 15, 2020, and May 17, 2021, so this year’s Tax Day might have snuck up on you. 

Enter the tax extension.

If you do request an extension, your new deadline will be pushed back six months to Monday, October 17, 2022, according to an IRS news release – but again, the extension is only for filing your return. You’ll still need to pay whatever taxes you owe in full by the April deadline, and failing to do so could result in costly penalties.No matter when you file, you can get your tax refund up to 5 days early¹ when you direct deposit with Chime and file directly with the IRS.

What is a tax extension?

So how does a tax extension work? 

A tax extension allows you to take extra time to file your tax return – a full six months, which is pretty cushy. But it doesn’t give you six more months to pay what you may owe.

So if you’re somebody who usually has to shell out to Uncle Sam come tax time – like a freelancer or small business owner – filing for a tax extension won’t give you breathing room to do the math and cut that check. It just gives you a few more months to show your work and turn in your documents.

That said, if you know you’re going to be late anyway – due to documents gone AWOL, for example – filing an extension can help ensure you don’t run into late penalties (again, so long as you pay any taxes owed on time). It can also give you more opportunities to ensure the accuracy of your return, make decisions about your elections, fund your retirement plan, and more. (We’ll dive into all the good reasons to consider an extension – and reasons for caution – in just a minute!)

So how do you get one?

How to file a tax extension

Here’s a sentiment that you don’t usually hear when talking about taxes: filing for a tax extension is very simple! You can file a tax extension online in just a few minutes through the IRS website, which links out to various third-party programs to help you file a tax extension request for free. You could also ask your tax preparer or accountant to help you.

In most cases, your request for an extension will be granted automatically without any additional explanation from you. It’s as simple as filing the form.

But should you file an IRS extension?

Reasons to file a tax extension

Although it may seem like procrastination, there are plenty of legit reasons to file a tax return extension:

  • You’re missing documents you need to file. Maybe your employer was late sending them out, or you needed a correction, but you can’t file your return if you don’t have your paperwork. In this situation, you need an extension to avoid being penalized.
  • You need more time to ensure your return is accurate and up-to-date. If your tax situation has changed recently (think: you got married, had a baby, changed jobs, etc.), you may qualify for new deductions or credits – and you may need that added time to update your paperwork and ensure it’s accurate.
  • You’re self-employed, and you want more time to fund your retirement plan. This is a special case, for sure, but if you work for yourself and open (or want to open) a SEP-IRA, SIMPLE IRA, or solo 401(k), filing for an extension on your return can also give you more months to put cash in those accounts.

Filing a tax extension: what to watch out for

As with any decision, there are considerations to, well, consider before pulling the trigger and filing for your extension. Keep in mind that: 

  • You’ll have to wait longer for your tax refund if you’re owed one. That springtime windfall is most folks’ favorite part about tax time–so waiting half a year for it is a major downer.
  • The IRS extension does not extend your time to perform certain money moves like switching your return status from married-filing-jointly to married-filing-separately or putting more money into a traditional or Roth IRA.
  • And, as mentioned, filing a tax extension does not give you extra time to pay your taxes, just to file your return.

Should I file a tax extension?

Filing a tax extension isn’t for everybody, but it can be helpful in the right context. If you know you’re going to be late, filing an extension can save you from pesky penalties. An extension can also help you make any changes you might need to, including electing deductions and credits. Less rush = more accuracy!

Furthermore, taxpayers who are already substantially behind on their taxes should file for an extension, and here’s why: if the government owes you a refund, you must file a return to receive it. The IRS sets a statute of limitations on how long you have to collect: if you don’t file within three years, you could lose out on money that’s rightfully yours. Filing a tax extension also extends this statute of limitations by six months to help you get your hands on your cash. After all, you earned it in the first place!

FAQs

When will I receive my tax refund?

Ah, yes – the most pressing question most of us have this time of year: where’s my money?!

While it’s an understandable query, the plain truth is that there’s a lot of wiggle room with the timing of a tax refund. According to the IRS, most refunds should be sent to your address or deposited to your checking account within six to eight weeks after you file your return. However, the timeline can be substantially longer – or shorter – than that.

The important thing is to use the money wisely once it arrives, however long it takes. We have some suggestions on what to do with your tax refund, including fluffing up your emergency fund, paying off debt, and saving for retirement. Cha-ching!

How do I deposit my tax refund to my Chime account?

Want to sit back, relax, and have your refund come to you? You can have your federal tax refund automatically deposited into your Chime account – no added effort necessary! 

Simply list your account and routing number in your paperwork when filing your return, and your refund will be posted directly to your account as soon as it’s available. Which, we should add, could be up to five days earlier¹ when you direct deposit with Chime and file directly with the IRS than it would be with another account. Just sayin’. 😎

Does Chime accept joint refunds?

If you and your (married) boo are filing together, good news: Chime does accept joint refunds. That said, the IRS can only deposit a tax refund into an account in the taxpayer’s legal name. So make sure the name of the primary filer is the one you have listed on your Chime account! 

If your name has recently changed (👰🎉), you can contact Chime Member Services to update the name on your account. And if, for some reason, the names don’t line up, don’t worry too much: after three attempts, the IRS will issue your refund as a paper check. (Which is to say, you do want to make sure they have the correct address on file.)

Conclusion

Filing a tax extension can be a great way to buy yourself extra time if you know you’re going to be late to file – but it doesn’t give you more time to pay the taxes you owe. Tricky! Good thing you’re a savvy taxpayer who stays up-to-speed on all the ins and outs of the IRS. 

Want to learn even more? Become a tax guru by checking out the top misconceptions about filing taxes.

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1 Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. These funds are generally made available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date. Federal tax payment files received from the IRS may be received up to 5 days early (based on data from the 2020 tax filing season). Chime makes no guarantee over when files are sent by the IRS and funds can be made available.

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