Automatic extension
Filing Form 4868 by April 15 gives you until October 15 to file Form 1040. No reason needs to be given. The extension is granted automatically as long as the form is filed timely with a reasonable estimate of total tax liability.
Extension is not for paying
Tax owed is still due April 15. Pay an estimated balance with Form 4868 to stop the failure-to-pay penalty (0.5% per month) and minimize interest. The IRS will compare your estimate to the eventual tax liability — if you grossly underpay, the extension may be considered invalid and the failure-to-file penalty (5% per month) may apply.
Three ways to extend
You can mail Form 4868, e-file through tax software, or simply pay any expected balance through IRS Direct Pay or EFTPS and check the box indicating the payment is for an extension — that automatic e-payment is treated as the extension request itself, no paper form needed.
Special situations
Taxpayers abroad or in the military serving in a combat zone receive automatic additional extensions without filing Form 4868. Members of the armed forces in combat zones receive at least 180 days after leaving the zone to file and pay.
State extensions
Most states accept the federal extension and require no separate filing. A few states require their own extension form. Check your state's rules to avoid surprise state-level penalties.
Software vs. paper filing
Most filers use commercial tax software or a tax preparer to handle Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return — and that is the right call for nearly all small-business returns. The IRS Free File program is open to taxpayers below an annually adjusted income limit and supports most small-business forms. Direct paper filing is technically still an option but is slower, more error-prone, and increasingly relegated to corner-case situations. Whichever path you choose, retain a digital PDF of the as-filed return for at least three years (six if you under-reported income by more than 25%).
Penalties for late or missing filings
Late or missing filings of Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return draw distinct penalties depending on the form: failure-to-file (5% per month, capped at 25%), failure-to-pay (0.5% per month), failure-to-deposit for payroll forms (graduated based on lateness), failure-to-file information returns (per-return penalty that scales with size and lateness), and accuracy-related penalties (20% of underpayment for negligence or substantial understatement). The dollar amounts are not trivial. Calendaring the form's deadline, setting up an electronic reminder a week in advance, and using a payroll or tax-prep service that auto-files are the cheapest defenses against accidental late filings.