Why it matters
A client who cannot finish the return by the April date can file Form 4868 and avoid the late-filing penalty, but the client still needs to pay the estimated tax by the original date. Interest and the late-payment penalty can start from that date.
Example
A client is waiting on a K-1 and cannot file by April 15. The preparer files Form 4868, estimates the tax and arranges a payment by the original date, then completes the return before the extended date.
Related terms
Questions about Form 4868
Does Form 4868 extend the time to pay?
No. It extends the time to file, not the time to pay. The taxpayer should pay the estimated tax by the original due date to limit interest and penalties.
How long does the extension last?
The automatic extension generally runs to October 15 for a calendar-year individual return. A taxpayer with a different tax year should check the form instructions.