Filing an extension, when you're not prepared to file your federal return, helps taxpayers to avoid a late payment penalties which can add up to 25% of the income taxes that a taxpayer owes. The typical IRS penalty for filing late is 5% per month of the unpaid amount, up to a maximum of 25%.
Missing the federal income tax filing deadline may lead to penalties and judgments from the IRS. If you do not feel that you will be able to file on time, applying for an extension can offer you an extra six months to file. However, the extension needs to be received (or atleast postmarked) by standard tax filing deadline, April 15th.
