A tax extension is not just for your personal taxes. Businesses, of all sizes, may also file for a tax extension if they require more time to file their taxes. However, if you are unsure how to go about this, the information here will help you along the way. The good news is that the process of filing for a business tax extension is fairly simple. Plus, getting an extension will save you from penalties and fines that can result from filing your taxes late.
Is the Extension Necessary?
One of the first things you should do is determine whether or not filing for a business tax extension is necessary. The IRS doesn’t care whether you file an extension, which is why many businesses get extensions every year. If you are unsure whether you can meet the March 16, 2015 filing due date, your best bet is to request an extension. That way, you won’t be scrambling to file at the last minute.
Filing Your Business Extension
Once you have decided to request a business tax extension, you will need to file the correct form. Form 7004 is used by most businesses to apply for an IRS extension, and it can be filed online or by paper mail. Form 7004 provides an automatic extension, which means you don’t have to sign the form or give a reason for your request.
To apply for a business extension, you must provide some basic information about your company on Form 7004. This includes the business name, address, and EIN (Employer Identification Number), as well as the business entity type (e.g., partnership, LLC, corporation, etc.). You will also need to give an estimate of your tax due for the year.
The Filing Process
If you are going to file a paper form, you must complete Form 7004 and mail it to the IRS. Form 7004 needs to be postmarked by the original due date of your tax return (March 16, 2015 for most businesses) in order to be accepted. However, you will not hear anything from the IRS unless your extension is denied.
If you want to e-file Form 7004 online, the process is much easier. Make sure to use an Authorized IRS e-file Provider to keep your sensitive information secure. Most tax extension software will walk you through the steps of filling out Form 7004, and then you can electronically submit your request to the IRS. When you e-file, you can get email confirmation that your extension has been approved by the IRS.
These are the steps for e-filing a business tax extension online:
- Provide the business’ identifying information, including the name, address, and Tax ID Number (EIN).
- Provide an estimate of your total tax due for the year.
- E-file your business extension directly to the IRS.
The waiting time to hear back from the IRS is usually about a day for e-filed extensions. Plus, you will be notified if your extension was approved or rejected. If the IRS rejects your Form 7004, you are allowed to make changes and resubmit your extension for free. But note that in most cases, rejections are caused by a Tax ID Number that doesn’t match the IRS records.
The best part about online business tax extensions is that as long as you submit all of your information accurately and on time, it will be approved. And with e-file, you have until 11:59PM (in your local time zone) to file Form 7004 online.