The IRS permits taxpayers to request an extension of time to file their annual income tax return. To apply for a business tax extension, you must submit the application (Form 7004) to the IRS.
Business extensions are a bit more complicated than personal extensions (Form 4868), although both types can easily be requested online. Depending on the type of business entity, the IRS will grant a company a 5- or 6-month tax extension.
Who Can File?
If you own a small business as a sole proprietor, you do not need to request a separate business extension for your company. Instead of using Form 7004 to file an IRS extension, you should use Form 4868 to request a personal tax extension. You would need a personal extension because your business activities are reported on your personal tax return. This is also generally true for single-member LLCs.
Most other types of businesses, including C corporations and multi-member LLCs, will need to file Form 7004 in order to extend their tax return deadline. Form 7004 should also be used to request extensions for partnerships, estates, and trusts.
When Is the Due Date for Extension Filing?
In order to obtain a tax extension, you must file your request (Form 7004 or Form 4868) by the original due date of your tax return.
For corporations, including C corporations and S corporations, the deadline to file a business extension (Form 7004) is March 15 for calendar year filers. (For 2014 extensions, that deadline is March 16, 2015 because March 15 is a Sunday.) Corporations that operate based on the fiscal year must file an extension by the 15th day of the third month following the close of the taxable year.
Corporations are generally eligible for a 6-month extension, which moves their filing deadline to September 15, 2015.
For most partnerships, estates, and trusts, the deadline to file a business extension (Form 7004) is April 15 for calendar year filers. Partnerships, estates, and trusts that operate on the fiscal year must file an extension by the 15th day of the 4th month following the close of the taxable year.
Partnerships, estates, and trusts are generally eligible for a 5-month extension, which moves their filing due date to September 15, 2015.
Sole proprietorships and single-member LLCs must file an extension (Form 4868) by April 15, the original deadline of their personal tax return. Form 4868 grants a 6-month extension, which moves the filing due date to October 15, 2015.
Taxes Are Still Due
A tax extensions gives you more time to file your tax return, however, tax payments are still due by the original deadline (March 16 or April 15 this year). If you fail to file or pay on time, the IRS will impose substantial penalties and interest on your outstanding tax liability. Therefore, it is in your best interest to pay as much as you can by the proper due date. Luckily, you have the option to pay your taxes with your extension request.
Filing Form 7004
Form 7004 can be filed electronically (a.k.a. “e-filed”) for most types of businesses, although there are a few exceptions. Alternatively, Form 7004 can be printed out on paper and mailed to the IRS. If you are mailing your business extension, make sure you send it to the correct address listed in the Instructions. However, it is important to note those who file Form 7004 by paper/mail will only hear from the IRS if their request is denied. But if you file Form 7004 online, you can receive email confirmation as soon as the IRS approves your extension.
In order to get a business extension, you must properly fill out Form 7004. You will need to provide your business information (including name, address, and EIN) as well as an estimate of your company’s tax liability. Those who are using Form 4868 (personal extension) should provide their SSN, rather than an EIN.
Numerous companies use business extensions every year. Whether you need more time to get paperwork in order or you’re waiting for documents to arrive, a business extension helps you postpone that annual filing deadline. Completing Form 7004 is easy, especially if you file electronically.