If you have just realized that tax day is around the corner and you are nowhere near ready to file, you are not alone. Millions of Americans find themselves scrambling as the April 15 deadline approaches.

Whether you are waiting on a stray 1099, dealing with a complex life change, or just procrastinated a bit too much, the good news is that you have options. Here is a step-by-step guide on what to do when you are not ready to file your taxes.

1. Do Not Panic, File an Extension

The single most important thing you can do if you cannot file by the deadline is to request a tax extension. Filing Form 4868 gives you an automatic, no-questions-asked extension to file your return by October 15.

Why is this so critical? Because the IRS imposes a failure-to-file penalty that is significantly more severe than the failure-to-pay penalty. The failure-to-file penalty is 5% of your unpaid taxes for each month your return is late, capping at 25%. Filing an extension eliminates this penalty.

2. An Extension to File is NOT an Extension to Pay

This is the most common and expensive misunderstanding about tax extensions. An extension gives you more time to submit your paperwork, but it does not give you more time to pay any taxes you owe.

If you expect to owe the IRS money, you must estimate the amount and make a payment by the April 15 deadline. If you do not, you will immediately begin accruing interest and a failure-to-pay penalty (0.5% per month) on the unpaid balance.

How do you estimate what you owe?

Look at your previous year's return. If your income and deductions haven't changed much, it's a good baseline.
Use a reliable tax calculator (like our Total Effective Tax Rate Calculator) to get a ballpark figure based on your current year's income.

It is always better to overpay your estimated tax slightly with your extension request. If you end up owing less when you actually file, the IRS will simply refund you the difference.

3. Fund Your IRA Before the Deadline

Even if you are filing for an extension, April 15 remains the hard deadline to make IRA contributions for the previous tax year.

If you want to lower your tax bill at the absolute last minute, contributing to a Traditional IRA can reduce your taxable income dollar-for-dollar (subject to income phase-outs if you have a workplace retirement plan). You can contribute up to $7,000 for 2025 (or $8,000 if you are age 50 or older).

You can make the contribution now and simply mark it for the prior tax year with your brokerage.

4. Gather the "Stragglers"

If you are extending because you are missing documents, use the extra time to actively hunt them down. The most common delayed documents include:

Schedule K-1s (if you are a partner in an LLC, S-Corp, or limited partnership)
Corrected 1099-B forms from brokerages
1099-MISC or 1099-NEC from freelance clients who are late sending them

5. Do Not Ignore State Taxes

Filing a federal extension does not automatically grant you a state tax extension in every state. While some states automatically accept your federal extension, others require you to file a separate state-level extension form.

Just like with the IRS, you must estimate and pay any state taxes owed by the April deadline to avoid state-level penalties and interest.

Bottom Line

Running out of time before tax day is a stressful but common scenario. The worst thing you can do is ignore the deadline entirely. By filing a simple extension form and making a good-faith estimated payment, you protect yourself from the harshest penalties and buy yourself six months to get your paperwork in order.