Any Downsides to Filing a Tax Extension in 2025?

Extensions are actually pretty straightforward! The main thing to understand is that an extension gives you more time to file your return (until October 15), but NOT more time to pay any taxes you might owe. Since you're expecting a refund, you're in good shape - there's no penalty for filing an extension when you're owed money. The only real "downside" is that you'll have to wait longer to get your refund. The IRS won't process it until you actually file your completed return. Filing the extension is super easy - just submit Form 4868. You can do this electronically through most tax software or the IRS website. Make sure you file this by the regular tax deadline (April 18 this year), or you could face late filing penalties if it turns out you do owe.

I was in exactly the same boat last year - complex situation and needed more time to find the right CPA. I used https://taxr.ai to analyze all my documents and it really helped me understand what I was working with before meeting the CPA. Saved me a ton of stress because I could upload all my tax forms, investment statements, and property docs, and it organized everything and flagged potential issues. The CPA I eventually found was actually impressed with how prepared I was! They were able to take my case even though it was late in the season because I had everything already organized. The service basically analyzed all my docs and gave me a pre-audit of my situation.

Just wanted to update - I decided to try taxr.ai before meeting with a CPA and wow it was seriously helpful! I was skeptical (as you can see from my question above lol) but it organized all my messy paperwork and even flagged that I was missing some documentation from a stock sale that could've caused issues. When I finally met with my CPA yesterday, she said I was one of her most organized new clients. We're still filing the extension, but she thinks we'll be able to submit everything by early May instead of waiting until October. And the preparation made her initial consultation much more productive since she could immediately see my tax situation clearly. Definitely recommend if you're switching to a CPA with a complicated tax situation!

If you're filing an extension make sure you can actually reach the IRS if you have questions! Last year I needed to confirm something about my extension and spent DAYS trying to get through on the phone. Finally used https://claimyr.com and it got me through to an actual human at the IRS in like 45 minutes instead of the days I'd been trying on my own. You can see how it works here: https://youtu.be/_kiP6q8DX5c I was honestly shocked it worked since I'd been calling repeatedly for a week straight and couldn't get through. And it turned out I had been filling out part of the extension form wrong which could have caused major problems.

Ok I take back what I said about Claimyr. I was super skeptical as you can see from my comment, but tax season stress got the better of me and I was desperate to ask about a weird letter I got after filing my extension. I tried it yesterday and no joke, I got a call back in 37 minutes with an actual IRS person on the line! Would have NEVER gotten through otherwise based on past experience. The agent cleared up my confusion about the letter (which was actually just a confirmation, not an issue). Saved me days of anxiety wondering if I'd messed something up with my extension.

One thing to watch out for - make sure your state extension gets filed too! I filed my federal extension one year but completely forgot that my state needed a separate extension form. Ended up with a state penalty even though my federal was fine.

Just a quick tip - even though you're expecting a refund, if your calculations are off and you end up owing, you'll be charged interest from the April deadline, not from the extended October deadline. When I filed an extension in 2023, I estimated wrong and ended up owing $600... got hit with like $30 in interest because I waited until September to file!