Extension Payment FAQs: What You Need to Know
Let’s face it—tax season can feel overwhelming, especially when you’re getting close to the deadline and trying to figure out what you owe. If you’re wondering about extension payments, you’re not alone. We get a lot of questions this time of year, and we’re here to help you sort through the confusion and get some clarity.
Here’s a breakdown of the most common questions we hear from our clients—along with practical answers that (hopefully) bring a little peace of mind.
What are extension payments, anyway?
An extension payment is a tax payment made by the April deadline (usually April 15th) toward the balance you think you’ll owe on your taxes. It’s not a special kind of payment—it’s just your estimated tax bill, paid ahead of filing your return.
So, even if you’re filing an extension, the IRS and state still expect you to pay what you owe on time.
Why should I make an extension payment?
Simple: To reduce the total amount of tax and penalties you’ll pay.
Filing an extension gives you more time to get your paperwork sorted, but it doesn’t give you more time to pay. If your payment is late—even by a little—you’ll start racking up penalties and interest. That can be an unnecessary expense.
By making an extension payment now, you can reduce or avoid those extra charges later.
What’s the point of filing an extension if I still have to pay?
It’s a good question, and the answer comes down to avoiding even bigger penalties.
The failure-to-file penalty is about ten times worse than the failure-to-pay penalty. Filing an extension buys you six extra months to get your return done—without that steeper penalty. But again, it doesn’t delay your payment due date.
What if I can’t pay everything I owe?
First, take a deep breath. You’re not alone, and there are options.
If you can’t pay the full amount in April, consider putting what you can toward your state taxes first. That’s because state penalties for late payments are usually harsher than federal ones.
Then, pay as much as you can to the IRS. Once your returns are filed, you can look into setting up a payment plan to reduce the penalties and interest while you get caught up.
How much should I pay?
If have no idea what you’ll owe this year, here’s a quick formula that’s often better than doing nothing:
Take the total tax from last year’s return
Multiply that by 110% (or 1.1)
Subtract any withholdings or estimated payments you’ve already made for this year
If that number is positive, consider sending that amount as your extension payment
If it’s negative? Your withholdings or estimated tax payments appear to already be greater than 110% of last year’s total tax. If your income increased, you may still owe some tax, but at least you’ve paid in more than what you owed last year.
What if I end up overpaying?
Good news—you’ll get it back. If you overpay when making an extension payment, you can claim a refund when you file your return. That money isn’t lost forever, it’s just temporarily being used to reduce potential penalties.
How do I make sure I get credit for the payment?
Easy: just let us know what you paid, and to whom (IRS or state). Upload that info to your client portal—amounts, dates, everything—so we can include it when we prepare your return.
How do I actually make an extension payment?
You’ve got options:
Mail a check with the correct payment voucher (IRS, Oregon, California)
Pay online at the IRS or your state’s tax site (Here's Oregon and California)
Important: Be sure to choose the correct tax year! For example, if you’re making a payment in early 2025 for your 2024 return, select the 2024 tax year. Otherwise, it might get applied to the wrong place.
Still feeling unsure?
That’s normal. Extension payments can be confusing, especially if it’s your first time dealing with them.
Remember that it’s not all-or-nothing. Use your best judgement to pay what you think you’ll owe by the April deadline. Even if you still end up underpaying, you’ll have reduced your total bill for the year!