Every spring, people file an extension thinking it buys them time to pay. It doesn't, and that misunderstanding is one of the most common ways small business owners end up with penalties.
What an extension does
For individuals, Form 4868 gives you until October 15 to file your return without a late-filing penalty. The IRS is clear that the extension is only for filing.
What it doesn't do
Any tax you owe is still due by the April filing date. If you can't file by April, estimate what you owe and pay it with your extension so you aren't charged for paying late.
Businesses
Many business returns use Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax returns. The same idea applies: more time to file, not more time to pay.
Not sure whether you'll be ready by April? Contact us early and we'll help you file on time or file the extension the right way.