How and When to File an Extension on Business Taxes
If you can't complete the tax return for your business by the filing date, you can request an extension of time to file. This article discusses how and when to file, what form to use, and other important information about extensions.
An extension of time to file is NOT an extension on paying taxes due. Even if you file an extension application, you must pay taxes due before the deadline, in order to avoid late payment penalties and fines.
Some Important Points about Extension Applications
- There is only one extension allowed per tax year. You can't keep getting multiple extensions.
- The extension is automatic for both types of extensions (personal or business). Just be sure to file the extension by the tax due date.
- Even if you don't owe any tax, file an extension if you can't file your return by the due date, If later you find out you owe tax, you will have to pay penalties for late payment.
- If you aren't sure how much to pay when you file your extension application, you can run a calculation of estimated tax due. (Don't forget to include self-employment tax on business earnings as part of your calculation!)
- You may also have to file an extension application with your state. Check with your state's taxing authority (state department of revenue or another similar title) to learn about the process for filing an extension for a state tax return.
- The IRS doesn't reject many extension applications. The most common reason an application is rejected is because of an error. Check to make sure you have filed the extension application correctly.
Business and Personal Tax Returns and Estimated Tax
Most business owners pay tax on their business income through their personal tax returns. These are called pass-through taxes because the tax passes through to the owner.
In these cases, the business owner has a special schedule included in their 1040 form showing business income. For sole proprietors and single-member LLC owners, that's Schedule C. For partners, multiple-member LLC owners, and S corp owners, that's Schedule K-1.
In addition, partnerships, S corporations, and corporations must file a business tax return and a separate extension application for this return.
Here's an overview of information about business tax return extensions:
Business Tax Extensions: A Chart
|Business Type||Tax Return||Due Date for Return & Extension Application||Extension App Form||Extended Return Due|
|Sole proprietor / Single-member LLC||Form 1040, Schedule C||April 15||4868 or online||October 15|
|Partnership / Multiple Member LLC business||Form 1065 for business||March 15||7004 or online||September 15|
|Partnership / Multiple Member LLC owner||Form 1040, Schedule K-1 (partner version) for owner||April 15||4868 or online||October 15|
|S Corporation business||Form 1120-S||March 15||7004 or online||September 15|
|S Corporation owner||Form 1040, Schedule K-1 (S corp version) for owner||April 15||4868 or online||October 15|
|Corporation||Form 1120||April 15 for December 31 fiscal year||7004 or online||October 15|
The exact due date for a specific year may change if the due date falls on a weekend or holiday. Check this article on business tax return due dates for the exact dates for the current year.
Here are details on extension applications for specific business types:
- Sole proprietorship and single-member LLC tax returns, filed on Schedule C and included with the owner's personal tax return are due on April 15, for the previous tax year. If you want an extension, you must file the extension application for a Schedule C and personal return by the tax return due date of April 15.
- Partnership tax returns are due on 15th day of the 3rd month after the end of the partnership's tax year (a month earlier than previously). Since most partnerships have a December 31 year end, partnership tax returns and extension applications are due March 15 of the following year.
- S Corporation tax returns are due the 15th day of the third month after the end of the company's fiscal (financial) year. All S corporations have a December 31 year end, so the due date for the extension application is March 15.
- C Corporation tax returns are due on the 15th day of the 4th month after the end of the fiscal year. For corporations with a December 31 fiscal year end, the extension application is due April 15.
Extension Application Forms and Filing Online
The extension application form you use depends on your tax return type:
For personal tax returns, use Form 4868 to file an extension application.These include sole proprietors, partners, LLC owners, and S corporation owners.
For business tax returns for partnerships, S corporations, and corporations, use Form 7004 to file an extension application.
You can file an extension application online or through your business tax software or your tax preparer. You can also get an extension by paying all or part of your estimated income tax due and indicate that the payment is for an extension using Direct Pay, the Electronic Federal Tax Payment System (EFTPS), or a credit or debit card. This way you won’t have to file a separate extension form and you will receive a confirmation number for your records.
When Extended Tax Returns Are Due
The IRS sets different automatic extension times for different types of returns. The deadlines are for months after the original tax return due date for each business type. Due dates extensions are:
- 6 months for partnership returns (this includes multiple member limited liability companies filing as partnerships). For a partnership with a December 31 year end, the extended tax return is due September 15.
- 6 months for corporate returns and s-corporation returns. For a corporation with a December 31 year end, and for all S corporations, the extended tax return is due September 15.
- 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. For sole proprietors, all of whom have a December 31 year-end; the extended tax return is due October 15.
If your corporation or partnership does not have a December 31 fiscal (financial) year end, you will need to calculate the number of months for the tax return due date, then add the number of months for the extension. For example, for a September 30 year end for a corporation, the corporate tax return is due February 15 of the following year, and the extended tax return is due August 15 of that year.
If you live abroad, you can get a special extension of time to file your tax return. See the Extensions section of IRS Publication 54 for more information.
Business tax preparation software programs include extension application filing as part of their services.
IRS. "Topic No. 303 Checklist of Common Errors when Preparing Your Tax Return." Accessed Dec. 27, 2019.
IRS. "Publication 509. Tax Calendars for use in 2020." Accessed Dec. 27, 2019.
IRS. "Extension of Time to File Your Tax Return." Accessed Dec. 27, 2019.