Filing a Tax Extension for Your Business Taxes
How to File an Extension on Business Taxes
Filing an Extension on your Business Taxes
Are you considering filing an extension for your business taxes? This article discusses:
- The question of whether it's better to file the extension or just complete your business tax return,
- The deadline for filing the extension application and the due date of the extended tax return, and
- The process of filing an extension, based on your business type.
IMPORTANT: You Must Still Make Your Tax Payment
Even if you file an extension, you must still pay your taxes by the due date, if at all possible. You will have to estimate the taxes due and make your tax payment by the due date.
Should You File an Extension on Your Business Tax Return?
The decision to file an extension requires some thought and consideration. There are both benefits and drawbacks to filing an extension. William Perez, Tax Planning Expert, discusses the pros and cons of filing an extension. You might want to review this article before you make your decision.
Deadline for Filing the Extension
If you don't think you can get your business taxes done by the deadline (March 15 for partnerships and multiple-member LLCs, corporations and s-corporations, April 15 for sole proprietors and single-member LLCs), you will need to file an extension.
The extension deadline is the same as the original tax return deadline. This also means that if the tax return deadline is changed for a particular year (because the due date is a holiday or weekend), the extension deadline is changed too. Here are the tax return deadlines for the current tax year.
Which Tax Return Extension Form to Use
For Corporate and Partnership Taxes
To file an automatic extension of time for corporations, s-corporations, partnerships, and multiple=member limited liability companies filing as partnerships, use Form 7004. This form requires you to estimate the amount of taxes you will owe.
For sole proprietorships and single-member LLCs filing on Form 1040
To file an automatic extension use Form 4868. This is the form used for personal tax return extensions, but it includes information from your Schedule C - Sole Proprietorship Income.
The IRS sets different automatic extension times for different types of returns
- 5 months for partnership returns (this includes multiple member limited liability companies filing as partnerships)
- 6 months for corporate returns and s-corporation returns
- 6 months for sole proprietorships, who are filing Schedule C along with their Form 1040, and for single-member limited liability companies filing as sole proprietors.
Tax Extension Due Dates
These due dates below are the legal dates set by the IRS for when the extended tax return is due. If the due date falls on a weekend or holiday in a particular year, the due date is the next business day. For the specific due dates for the current tax year, see this article on business tax return due dates, which is updated annually.
- Partnerships and Multiple member LLCs must file their partnership returns by April 15. The five-month extension puts the extension due date on September 15.
- Corporations and S Corporations must file their corporate tax returns six months after the end of their fiscal year. S-corporations all have a December 31 due date, so an S corporation tax due date is March 15, and the extension is due by September 15. Corporations can have any fiscal year end, so you'll need to calculate the due date for the tax return and extension. As an example, a corporation with a December 31 year end must file corporate taxes by March 15. The six-month extension is due September 15.
- A sole proprietorship or single-member LLC (filing as a sole proprietorship) extension is for six months, so they must submit their extension by October 15.