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How Much Should I Send in with My 1040 Extension in 2025?




Tax season can be stressful, especially if you’re unsure about your tax liability or don’t have all your paperwork ready. Filing a tax extension (Form 4868) can be a smart move—but it’s important to understand how much to pay when you file it.


Filing an extension gives you more time to file, but it does not extend the time to pay taxes owed. Sending in a thoughtful estimate helps you avoid penalties and interest while buying time to organize your return.


Why Filing an Extension Can Be Smart

Filing an extension in 2025 can benefit taxpayers in several ways:

  • Avoid audit timing pressure: IRS audits are often assigned based on first-to-file, so filing later can actually reduce audit risk.

  • Time to maximize deductions: You have more time to review credit card statements, bank accounts, and other records to ensure you capture every eligible deduction.

  • Time to hire a tax advisor: The early part of the year is busy, and finding the right CPA or tax professional mid-Q1 can be challenging.


Even if you can’t pay the full amount owed, filing an extension is still critical. The failure-to-file penalty (5% per month, up to 25%) is far more expensive than the failure-to-pay penalty (.05% per month, plus interest).


How to Estimate Your Tax Payment

Figuring out what to send in with your Extension can get complicated—especially if you have multiple income sources, a small business, investments, or crypto. Let’s simplify it with 5 general methods, from easiest to most time-consuming.


1. I Didn’t Owe Last Year

If your 2025 income and deductions are similar to 2024, and you didn’t owe taxes, you likely don’t need to send a payment. Use your 2024 return as a guide.


2. I Owed Last Year, Same Income

If you owed for 2024 and your 2025 income is roughly the same, just send in the same amount you paid last year. Simple.


3. The 25% “Safe Harbor”

Made more money in 2025? Here’s a quick method: take what you paid in 2024, then add 25% of your extra 2025 income. Send this total with your Extension. It’s a rough estimate, but better than nothing and often close enough to avoid big penalties.


4. Closest Tax Rate Method

Want more accuracy?

  1. Find your marginal tax rate on your 2024 return.

  2. Calculate additional 2025 income.

  3. Check if it pushes you into a higher bracket.

  4. Multiply the extra income by the correct rate.

  5. Add this to last year’s taxes (Method #2).

  6. Send this total with your Extension.


Example 4.1: Extra $50,000 at 24% → $12,000 tax. Add any previous balances, then send that amount.


Example 4.2: Extra $50,000 split across 12% and 22% brackets → $9,000. Add $5,000 from last year → $14,000 total to send.


5. Full Mock-Up

If you want to be very precise, prepare a full draft of your 2025 return. Add 5–10% to be safe and send with your Extension. Most preparers won’t do this mid-season, but it works if you already have most info ready.


Frequently Asked Questions (FAQ)

Do I have to pay if I file an extension?

Yes. Filing an extension only delays your filing deadline—not your payment deadline. You should estimate what you owe and pay by April 15 to avoid penalties and interest.


What if I can’t pay the full amount?

Pay what you can. Paying even a portion of your estimated tax helps minimize penalties.


How do I know how much to send in?

Use your previous year’s tax return as a baseline and see the 5 methods above. Adjust your deposit based on income changes and deductions.


What’s the penalty for not paying on time or filing an Extension?

Failure-to-pay penalty: .05% per month, plus daily interest (currently ~7% annually).

Failure-to-file penalty: 5% per month. Combined penalties can reach 47.5% of the unpaid tax over time.


What happens if I overpay with my Extension?

The IRS will refund the overpayment when you file your final 1040—or you can apply it to next year’s taxes.


What’s the IRS Safe Harbor to avoid any Failure-to-Pay Penalties?

Pay at least:

  • 100% of last year’s taxes (if AGI < $150,000)

  • 110% of last year’s taxes (if AGI > $150,000)


Do I need to file anything to send in a payment with my Extension?

No. Submit your payment with Form 4868—no additional form needed.


Final Tip

Filing an extension is a smart tax move—but only when paired with a smart payment strategy.

Don’t wait until October to find out you owe thousands (plus penalties). Estimate. Pay something. Then file with confidence when you’re ready.




If you want help calculating your 2025 extension payment or optimizing your filing strategy, book a free discovery call with one of our experienced CPAs. A short conversation now can help you avoid penalties, interest, and unnecessary stress.




 
 
 

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