Should You File a Tax Extension? What to Know as You Approach Retirement

As tax season rolls around each spring, many people wonder if they should rush to file their tax return or request a filing extension. The IRS allows individual taxpayers to request up to six additional months to file their federal tax return, provided they submit the request by the original filing deadline. While millions of Americans file for an extension every year, not everyone understands when it makes sense or which situations can make extra time a smart move.

For individuals in or approaching retirement, tax situations often grow more complex. Multiple income sources, investment accounts, late‑arriving documents, and major life changes can affect your ability to file by the April deadline.

Here are several common reasons to consider filing an extension and how to decide whether it’s right for you.

Missing or Delayed Tax Documents

One of the simplest and most common reasons to file an extension is missing documentation. The IRS emphasizes that filing an extension can help ensure you have everything needed to submit an accurate return, especially when you’re waiting on delayed investment forms or corrected statements.

For individuals with brokerage accounts, IRAs, or employer retirement plans, corrected 1099s can arrive as late as March. Filing too early increases the risk of errors and the need to amend your return later.

If you receive income from pensions, Social Security, annuities, rental properties, or multiple custodians, an extension can give you the breathing room needed to compile complete and accurate information.

Life Events and Unexpected Disruptions

Illness, a death in the family, or major personal disruptions are also legitimate reasons people request extra time. According to tax experts, many people need extensions simply because life gets in the way and prevents them from gathering the information on time.

For retirees, a hospitalization or caregiving responsibilities may delay preparing and organizing the records. The IRS does allow penalty relief in certain circumstances when shown reasonable cause, but filing an extension proactively is often simpler and avoids the issue.

Complexity from Retirement Income and High‑Net‑Worth Issues

Approaching retirement often creates additional layers of tax complexity. Required minimum distributions (RMDs), Roth conversions, Social Security taxation, capital gains, and multiple income streams can make it harder to file by the April deadline. Many retirees underestimate how long it takes to organize records from several accounts, especially if they work with multiple custodians or financial institutions.

High‑net‑worth individuals may face even more complexity from investment income, trust distributions, or business activity. Failing to file accurately can lead to amended returns, penalties, or IRS notices. Allowing yourself more time can help reduce these risks.

Waiting on Professional Advice

For many people in midlife or retirement, taxes interact closely with financial planning. Whether you are considering the timing of a Roth conversion, reviewing withdrawal strategies, or exploring how charitable giving will affect your tax bill, filing too early can limit your options.

This is especially true for those whose tax situation intersects with estate planning or Medicare premium thresholds. An extension gives your tax and financial advisors additional time to collaborate.

What an Extension Doesn’t Do

It’s important to remember that an extension gives you more time to file, not more time to pay. The IRS makes clear that interest and penalties begin accumulating immediately after the April deadline on any unpaid tax balance, even if you have an extension in place.

If you believe you owe taxes, you should estimate and pay that amount by April 15 to avoid extra charges. If you expect a refund, there is no penalty for taking additional time to file.

How to Request an Extension

The IRS offers three simple ways to request an automatic six‑month extension:

• File Form 4868 electronically.
• Mail a paper Form 4868.
• Make an electronic tax payment and indicate it is for an extension, which automatically submits your request.

Most taxpayers find the electronic payment or e‑file options to be the quickest.

Why Working with a Financial Advisor Helps

As you approach or transition into retirement, taxes become a bigger part of your overall financial picture. A qualified financial advisor who integrates tax planning into your long‑term strategy may be able to help evaluate whether an extension is appropriate and may assist in coordinating tax-related decisions with your retirement income, investments, and estate planning strategy.

Extensions can be useful tools, but they work best when paired with a thoughtful plan. If your financial life feels complex, taking the time to file correctly and working with appropriate professionals may help reduce administrative issues.

This is intended for informational purposes only. You should not assume that any discussion or information contained in this document serves as the receipt of, or as a substitute for, personalized investment advice from Savant. Please consult your investment professional regarding your unique situation.