How to File a Business Tax Extension Online
Multiple Options for Filing a Business Tax Extension
The process for filing an extension application for business taxes involves filing a simple form online. The form you use depends on your business type. In some cases, you may not even need to file an application form.
The tax deadline is looming and you're not ready to file yet. You may have to track down some straggling financial records, or maybe some other complication has cropped up to make it impossible to file your business return on time. Not to worry -- the Internal Revenue Service has forms for that.
Should I File an Extension?
You may have heard that the IRS looks more closely at businesses that file extension applications. Check out this article about the pros and cons of filing an extension application.
Can My Extension Request be Denied?
Form 4868 for personal tax returns (including business tax schedules) is an "Automatic Extension" - in the title of the form. Form 7004 for extensions for business tax returns (partnerships and corporations) is also automatic. So, your application.
There is No Extension for Paying Income Taxes
Even if you apply for an extension for filing your business income tax forms, you can't extend the payment deadline. You must calculate and pay any income taxes and self-employment taxes by the due date of the form. To avoid IRS penalties for underpayment and late payment, you should pay at least 90% of the tax due. To estimate the tax you must pay, you might want to use an estimated tax calculation.
Definitely request an extension if you're not prepared to file your actual return on time. The late filing penalty can be more expensive than penalties and interest associated with paying late. So get your extension request in, then address the nuts and bolts of preparing your return and figuring out what you owe.
How Do I File an Extension Application?
- Businesses filing income taxes on Schedule C should use Form 4868. This typically includes sole proprietors and single-member limited liability companies (SMLLC) where profits from your business are included in your personal income. You submit Schedule C with your Form 1040.
- Corporations and partnerships use Form 7004. This includes multiple-member LLC businesses filing as partnerships, and S corporations. The extension approval is automatic for most corporations (check the Instructions for Form 7004 for more details.)
Just Pay Your Income Tax Bill
The IRS says you don't have to file Form 4868 if you just pay your income tax bill electronically. They say:
You don’t need to file Form 4868 if you make a payment using our electronic payment options. The IRS will automatically process an extension of time to file when you pay part or all of your estimated income tax electronically. You can pay online or by phone.
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 the IRS Direct Pay system, EFTPS, or your credit/debit card. You will receive a confirmation number for your records.
E-File Using a Software Program or Tax Professional
You can e-file your extension application using your personal computer or you can have your tax preparer do this. You can also use IRS "Free File" which allows you to file an extension and request payment options online.
All the major tax software applications allow you to file an extension using either Form 4868 or Form 7004. When you log on to prepare your return, there should be a tab or option for filing an extension. There may not even be a charge, although you'll eventually have to pay to prepare the return itself. You can use either the personal or home business version of the product to file Form 4868 or use the business version to file Form 7004. You can do this immediately, then go back days or weeks later to complete your tax return.
If You Don't Want to File Online
You can always file an extension application the old-fashioned mail-in way. You can print out either form from the IRS website (Form 4868 and Form 7004), and they come complete with instructions. Mail it in as many days as possible before the tax deadline.
NOTE: Tax laws, rules, and forms can change periodically. Please consult with the IRS website or a tax professional for the most up-to-date advice. The information contained in this article is not intended as tax advice and it is not a substitute for tax advice.