Filing an Extension Application for Corporate or Partnership Taxes
Dates and Process for Filing an Extension Application - Form 7004
IRS Announced that 2019 Tax Day is Now July 15, 2020
The IRS has announced a 90-day extension for filing and paying 2019 federal income taxes, to July 15, 2020. This deadline change also affects filing of extensions. Most partnership tax returns were due March 15, 2020, so this deadline extension doesn't affect them, but it does affect partners filing Schedule K-1 as part of their personal tax returns.
At times, a small business may need to use the Internal Revenue's Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns—Form 7040. Form 7004 is the form used to file for an automatic extension of time to file your business tax return for a partnership, a multiple-member LLC filing as a partnership, a corporation, or s-corporation.
You must file this extension by the due date of your business tax return. This is an automatic extension, so you don't have to worry about your extension being approved.
Then, you must file your return by the extension deadline. If you want to apply for an extension, the important dates you need to know are: (a) The date the application is due and (b) the date the extended tax return is due. But first, an important reminder:
Income Taxes Must Be Paid by Due Date
The IRS says, "Form 7004 does not extend the time for payment of tax." You must pay taxes due (estimated) by your tax return due date, even if you file an extension application. You will need to estimate as best you can because under-estimating can subject your business to fines and penalties.
Due Dates for Returns and Extension Applications
The due date for filing extensions on any federal income tax return is the due date of the tax return. Tax return due dates may change each year. If the due date is on a weekend or holiday, the actual due date for that year is on the next business day.
Extension applications for all business taxes must be filed by the tax return due date, taxes due must be estimated, and taxes must be paid by the due date, even if an extension application is being filed. The balance of any taxes due must be paid at the time the return is filed.
Corporate Tax Return Due Date and Extension Due Date
Extension Application Due Date: Corporation tax returns are due and taxes are payable on the 15th day of the fourth month after the end of the company's fiscal (financial) year (effective with 2016 tax returns), on Form 1120. So, a corporation with a year-end date of December 31 must file and pay taxes by April 15. This is also the date when the extension application must be submitted.
Deadline for Submitting Extended Return: Corporations have six months from the extension application due date to file the tax return. So, a corporation would have until October 15 to file the partnership tax return.
Partnership Tax Return Due Date and Extension Due Date
Extension Application Due Date: The due date for partnership and multiple-member LLC tax returns on Form 1065 is the 15th day of the third month after the end of your partnership's fiscal (financial) year. For a December 31 year-end, the due date is March 15. (The old due date, prior to 2016, was April 15.) This is also the date on which the extension must be filed.
Extended Return Due Date: Partnerships and multiple-member LLC's have six months from the extension due date to file the tax return. So, a partnership would have until September 15 to file the partnership tax return.
S Corporation Tax Return Due Date and Extension Due Date
Extension Application Due Date: S corporations must take a December 31 year-end to coincide with the tax return due date of the owners, so S corporation tax returns are due March 15, filed on Form 1120-S. This is also the date when the extension must be filed.
How to Complete Form 7004 for Business Tax Return Extensions
Form 7004 is used to file an extension application for corporations, S corporations, partnerships, and multiple-member LLC's filing as partnerships. Form 7004 is a short form, by IRS standards. It only requires you to:
Include the name and address and Tax ID number (usually the employer ID number) for your business.
Enter the code for the tax return you are preparing (the codes are listed. For example,
- If the extension application is for an S corporation (Form 1120-S), you would enter Code 25.
- If the extension application is for a partnership or multiple-member LLC (Form 1065), enter Code 09.
- If the extension application is for a corporation (Form 1120), enter Code 12.
The form asks if your business qualifies under Regulations section 1.6081-5,.This section related to foreign corporations, domestic corporations that transact business and keep books outside the U.S., or domestic corporations whose principal income comes from U. S. possessions.
Indicate if this is a short tax year, and check the box for the reason for the short year.
Show the tentative total tax. This is the amount of tax due for the business for that year. Even though you don't have your return done, you will need to do some calculations to get this number.
Show the total payments and any credits applied to your account, and subtract this number from the tentative total tax.
Finally, show the balance due. You can pay by debit or credit card (use your business account.
How to File Form 7004
You can file Form 7004 in two ways: (a) by mail, or (b) by e-filing.
The IRS has a chart showing where to file Form 7004, depending on the tax return being filed and the location of your business.
If you don't have a tax preparer filing your return, the IRS suggests that you use the Modernized E-File system to e-file your extension application. This system allows you to choose a provider from a list.
You can also file your business tax return extension application online using your tax return preparation software, or your tax preparer can file online for you.