11761: 1040 - Individual Extension Form 4868

Extensions are generated using screen EXT, located on the Other Forms tab of the Data Entry Menu. An extension does not extend the time to pay tax due. We recommend that you e-file as early as possible before the deadline to ensure a timely filing.

Starting in Drake23 you can create batches of individual extensions instead of using the steps below. See KB 18377 for details on this new feature.

Preparing an Extension

To prepare to e-file the extension:

1. Open the return.
2. Enter demographic information on screen 1.
3. Navigate to screen EXT.
4. From the 4868 drop list, select X to produce Form 4868.
5. Make one of the following entries, or the “Amount you’re paying” on Form 4868 will be blank.
   • Select the option Taxpayer is paying the entire amount of tax due.
   • Enter the amount to be paid in the field Amount paid with extension.
6. Enter the financial data required by Form 4868, which you can do either on the EXT screen or in data entry in the return. Override fields on screen 4868 pull data entered elsewhere in the return if no override amount is entered.
7. Open the EF screen.
8. Under the Federal e-File Override section, select 4868.
9. Under the State e-File Override section, select Do NOT send any states (if you do not intend to send a state extension). To send a state or city extension in addition to a federal extension, select the appropriate option from one of the drop lists.

Arranging a Payment

Direct Debit

1. Open the PMT screen, accessible from the General tab of the Data Entry Menu.
2. From the Federal selection drop list, select Y to indicate that the taxpayer’s account information is to be used for the federal extension; make a selection from the State/city selection drop list if you wish to use the same account information for applicable state or city extensions.

   NOTE: If the taxpayer wants to use a different account for state or city extension purposes, steps 3 and 4 (following) must be repeated for the state or city in the appropriate Account #2 or Account #3 section on the lower-half of screen PMT.

3. Enter the name of the taxpayer’s financial institution from which the extension amount is to be direct debited. The RTN, Account number, and Type of account must be entered twice for verification purposes.
4. Enter a Requested payment date.
   • If the return is transmitted to the IRS on or before the extension due date in the current processing year, the Requested payment date must be on or before the due date and cannot be more than five days prior to the current date.
   • If the return is transmitted to the IRS after the extension due date, the Requested payment date cannot be later than the current date and cannot be more than five days prior to the current date.
5. Open screen PIN, and:

1. Enter the current date for the PIN signature date.
2. Enter the appropriate ERO PIN.
3. Have the taxpayer (and spouse, if applicable) agree to the automatically generated PIN signature. If the taxpayer wishes to use his or her own PIN, have him or her enter it, and mark the Taxpayer entered check box.
4. Select the 4868 with payment option.
5. Agree to the Direct Debit Consent.

Credit Card

1. Click the Pay balance due with credit card link at the top of screen 4868 to open screen IFP.
2. Select Form 4868 as the payment type.
3. Recalculate the return (Ctrl+C), and press Authorize Card.
4. Follow the Drake Software™ E-Payment Center prompts.

Check or Money Order

Choose one of the following methods:

• Print Form 4868, and cut following the upper dotted line. This indicates that the Form 4868 was already e-filed and accepted and that you are only submitting the voucher with the payment by mail. 
• Generate a voucher by selecting the option Produce 1040-V for extension on screen EXT. The voucher shows the amount paid that is displayed on Form 4868 unless you enter a different amount in the associated override field.

Filing the Extension

1. Recalculate, view the return, and clear all EF Messages on the ETD_MSG page. View the EF Status page, and confirm that Form 4868 will be transmitted. NOTE: The EF Status page is produced only if Print EF status page is selected at Setup > Options > EF tab.
2. Exit the return, and open the EF Selector (EF > Select Returns for EF). Confirm only Form 4868 (unless a state extension is also being e-filed) is listed for the return in the EF Documents column of the EF Return Selector. If so, select the return, and proceed through the usual steps to transmit. 

Frequently Asked Questions

• I e-filed a 1040 return before the deadline and it was rejected - I am working on the fix now, and the deadline is approaching. Do I have to file an extension?
  • If you e-filed before the deadline and the return is rejected, you have a perfection period of 5 days after the deadline in which to correct and re-file the return. If there is a chance you may not be able to fix and file the return within the time provided, you should file an extension or paper file the return before the deadline passes. For more information, see Related Links below.
• Do I have to clear all of the red messages before I can e-file an extension?
  • No - you need to clear only the errors on the ETD_MSG page when filing for a 1040 extension.
• I e-filed the extension already - now how do I e-file the actual return - it keeps showing the 4868 is being sent again.
  • Check the entries made on the EF (EF Selection) screen. 1040 should be marked when you are trying to send the regular return. Also check the box Extension was previously filed; ready to file tax return on the EXT screen. 
• How can I create a voucher for the client to pay the federal balance due with the extension?
  • On the EXT (4868) screen there is a Produce 1040 - V for extension option as well as a field to enter the Amount to print on 1040-V. 
• I previously filed the extension and now I am e-filing the 1040, but the letter reflects the 4868 instead of the 1040.
  • On the EXT (4868) screen select Extension was previously filed; ready to file tax return.
• What is the difference between the 4868 and the 2350? Which should I use?
  • Both forms extend the filing date for Form 1040 and 1040-NR. If you qualify to file the 2350, use that form; otherwise, file the 4868. Screen EXT is used to complete either form. 
  • Use Form 4868 to apply for 6 months more to file (until October 15). 4 months more to file if you were allowed an additional two months, until June 15, to file because you were “out of the country” (as defined in the instructions with Form 4868) on April 15 (this extension also takes you to October 15).
  • Use Form 2350 only if you expect to qualify for the foreign earned income exclusion and/or the foreign housing exclusion or deduction and meet other qualifications stated in the 2350 instructions. The length of the extension will depend on the details of the return.