With the arrival of spring, April 15th will be here soon and some people might not be ready to file their tax returns in time. Fortunately, the IRS lets taxpayers request a time extension to file their taxes, provided the request is received by April 15th. As long as you complete Form 4868, you can receive an automatic six-month extension. Before you rely on a tax extension, there are some important things you should know.

Benefits

There are several key benefits to requesting a tax extension. The most obvious benefit is that you have six additional months to finish up your return. Sometimes this additional time is necessary if you’re waiting on documents to come in the mail, or if you simply need more time on deductions. You can reduce your late penalties with an extension request. If you file after the extended deadline, it can preserve your tax refunds. If you’re self-employed, extension requests give you extra time to fund a retirement plan. Additional time allows you to change the nature of your IRA contribution and you can make various elections on your return. Lastly, tax extensions can improve the accuracy of your tax return and help lower your tax preparation fees.

Downside

Just because you have extra time, this doesn’t mean you have extra time to pay. A tax a still due by the original deadline date. If you have an outstanding balance, a late payment penalty will still be charged at 0.5% per month and there will be interest at 3% per year. If you’re a married couple, an extension won’t give you more time to switch to a separate tax return. You also won’t have extra time to fund an IRA with an extension request. If you’re a taxpayer that was approved for an offer in compromise, you are ineligible for an extension and must file by the April deadline during your five-year probation.

How to Request an Extension

Download Form 4868 and fill it out. Write a check for the money you owe if you owe a tax. Mail the form and check before April 15th by certified mail with return receipt requested so you have proof that you mailed it and the IRS received it. If you would rather file your extension online, be sure you do it before midnight; it can take up to half an hour to fill out.