The Internal Revenue Service (IRS) opened the tax filing season on Jan. 26, and the deadline for filing (without an extension) is April 15.
For taxpayers requesting an extension, the deadline is Oct. 15, according to the IRS. And many Americans opt to delay filing their taxes, as 13% of Americans, or 20 million, take this route, according to CBS News.
It’s important to know that the IRS imposes a late filing penalty, usually 5% of the amount due for each month or part of a month your return is late. The maximum penalty is 25%, according to an IRS fact sheet.
There are several reasons taxpayers choose to wait until the last minute to file their taxes, but for homeowners, it might not be the best idea.
Blake O’Shaughnessy, founder of the real estate platform Ownli, says that a tax extension isn’t automatically a bad move, but many homeowners misunderstand what it actually does.
“It gives you more time to file, not more time to pay. If you owe and you guess wrong on what that number looks like, the meter keeps running in the background,” he explains. “Interest doesn’t care that you filed in October instead of April. In a year where property taxes, insurance, and general housing costs already feel heavier, that’s not a small detail.”
Larger refunds in 2026 for homeowners
This year, refunds are expected to be larger thanks to the tax changes in the One Big, Beautiful Bill Act (OBBBA), which President Trump signed into law in July 2025
In fact, the Tax Foundation estimates the OBBBA reduced individual taxes by $129 billion for 2025.
“And outside estimates suggest up to $100 billion of that could be received as higher refunds this filing season, pushing average refunds up by up to $1,000,” according to the Tax Foundation.
Stephen Kates, CFP, Bankrate financial analyst, says refunds for the 2025 tax year may be larger for several reasons.
First, many taxpayers will see lower actual tax liability due to updated tax rules, such as the higher SALT deduction, adding that relatively few people adjusted their withholding to reflect those changes, which may have resulted in over-withholding.
“That excess withholding will be returned in the form of a refund,” he says.
Against this backdrop, there are situations where an extension makes sense, including complicated returns, missing documents, or major life changes.
“But it shouldn’t be the default. Housing expenses don’t wait just because paperwork does, and most people are better off knowing their real number sooner rather than stretching the timeline and hoping it works out,” says O’Shaughnessy.
Inflation, high prices, and still-stubborn (though declining) mortgage rates have put a strain on many American homeowners. In fact, Northwestern Mutual’s 2025 Planning & Progress Study found that one in three (32%) adults list housing costs as a top financial worry.
Northwestern Mutual advisor Heather Quinn says refunds could be the largest lump sum a household receives all year.
And choosing to file later through an extension means delaying access to those dollars, she explains.
“For already-stretched families, that delay can push households toward relying more heavily on credit cards or short-term loans for mortgage payments, property taxes, or repairs, accumulating interest costs and potentially impacting long-term financial stability,” Quinn adds.
Pros and cons of filing an extension for homeowners
Pros
The primary benefit of filing a tax extension is the additional time it provides to prepare an accurate return.
As Bankrate’s Kates argues, an extension can be especially helpful when gathering documents or records related to complex financial events, such as a home sale, a major casualty loss, or a significant renovation.
Cons
Eric Croak, CFP, accredited wealth management advisor and president of Croak Capital, says the cost of that additional time is very real.
“You literally lose out on the money you have coming. If you’re owed a $4,500 refund but wait until October 15th to file, that $4,500 could otherwise be gathering interest in a high-yield savings account while you pay 22% APR on credit card debt or interest on a home equity loan,” he says.
In addition, property taxpayers who owe taxes in the spring or summer months will also be disappointed to have to wait that long for a refund, as they may need to pay their bills.
For homeowners, there is also a practical consideration, as lenders typically require your most recent filed tax return for a mortgage, refinance, or home equity loan, says Quinn.
“So delaying your filing can slow down financial decisions tied to your home. Liquidity matters right now. In a competitive housing market, timing is critical, and if you do not have your financial documents in order when you are ready to make an offer, you could miss out on the home altogether,” she says.
All in all, experts say that cash flow matters more in this instance, and affordability isn’t just about your mortgage rate —it’s about liquidity.
“If you’re tight on reserves and you postpone receiving several thousand dollars from your tax return that could shore up your balance sheet, you’re increasing financial stress at a time when stability is critical,” explains Steve Sexton, CEO of Sexton Advisory Group.
Timing refunds toward housing-related goals
Timing your tax refund to align with your housing-related goals allows you to act quickly, avoid costly borrowing, and ease financial stress.
For instance, Quinn says that whether you are building a down payment fund, covering property taxes, making necessary home repairs, or strengthening your emergency savings, filing on time allows you to put that money to work sooner.
She adds that an extension might make sense if your tax situation is complex, and accuracy requires more time. However, she says that in more straightforward cases—especially when housing goals are time sensitive or savings reserves are limited—filing on time is often the more strategic move, allowing you to receive a refund sooner and keep longer-term goals like buying or improving a home on track.
Croak echoes the sentiment, noting that getting a refund early could allow homeowners to pay their property tax bill, for instance, without touching their savings or using credit.
Hiring a contractor to do home repairs can be another reason to file early, he says.
“If you know you’ll get a $3,800 refund, use that knowledge to schedule repairs for May or June before contractors are slammed with work,” Croak adds.
Sure, a tax extension might be necessary if you own rental property, have complex business income or partnership K-1s that don’t arrive until later, Corak adds.
“If your return is simple and you’re just a W-2 earning homeowner who claims mortgage interest, an extension isn’t going to do you any good,” he says.
In other words, a tax refund can be a powerful financial tool if you deploy it intentionally, according to Sexton.
For aspiring homeowners, it can accelerate a down payment or cover closing costs, and for current homeowners, it can fund property taxes, replenish an emergency reserve, or knock out deferred maintenance, he says.
“A new roof or HVAC system isn’t optional, and waiting until it fails is far more expensive,” he says.
Sexton adds that if you’re simply procrastinating, or if delaying your refund compromises your ability to fund housing priorities, filing a tax extension doesn’t make any sense.
“Financial timing is strategic. Extensions are tools, but they should serve a purpose. Not create avoidable friction in your cash flow,” he adds.