Tips to Meet the Small Business Income Tax Filing Extension Deadline

The deadline to request an extension for filing your small business income tax return differs depending on your business structure. For corporate and sole proprietorship returns, the deadline to file for tax year 2023 is April 15, 2024. The deadline for partnerships and S corps is even earlier, on March 15, 2024.

If you took an extension to file your business income tax return, the new deadline is six months after the original tax deadline. Partnerships and S corps must file extended returns before Sept. 16, 2024, while sole proprietors, multi-member LLCs and corporations have until Oct. 15, 2024, to file. If you don’t file by the extension deadline, you’ll face penalties for late filing.

What if you’re still missing that last piece of information?

Do your best to get it, but if that’s not possible you may want to make a good estimate and file anyway. You can always amend your return if necessary, which is a better alternative than getting hit with a penalty for missing the tax filing deadline. You also need to file your business returns so you and other partners or shareholders in the company can use the information to file individual tax returns.

Read the tips below to help you finish and file Form 1120, 1120-S, or 1065.

1. Gather what you need.

Preparing your return will be easier and more efficient if you don’t have to repeatedly stop to look for necessary information.

Make sure you have the following items before you start preparing your business return (download the 1120, 1120S, or 1065 tax return checklist):

• Last year’s business tax returns, unless this is a new business
• Financial statements: income statement and balance sheet
• Transaction history and summary statement of shareholders’ capital accounts
• Shareholder information, including names, current addresses, and Social Security numbers.
• Payroll tax returns or summaries
• Form W-2 statements
• Sales tax returns
• Records of federal, state, and local taxes paid
• Business tax preparation software

2. Get organized.

Grouping and putting your information in order makes it a lot easier to answer the questions TaxAct® will ask as you move through the program. Our tax preparation software prompts you for the required information and helps identify the tax benefits to which you are entitled.

Keep your last year’s business tax return handy for reference. The answers to many questions, such as business codes, are the same from year to year. In addition, it’s important that the amounts of beginning assets, liabilities and shareholder or partner accounts on your return match the ending amounts on last year’s return.

3. Keep good notes as you prepare your business return.

Good records are important because there may be many occasions when you need to remember how you arrived at a particular amount or the details around other information on your return. Keeping detailed notes as you prepare your return can save you time later. For example, you may need supporting information when you prepare next year’s return or if you sell a business asset.

As you prepare your return, take note of things like how you allocated expenses between business and personal use, additional expenses, and differences between financial statements and your tax return. Print your notes if necessary, and keep them for as long as you save the related tax returns.

4. Read and review your return.

When you think you’re done, read the entire return one more time. This may be easier to do if you print it first. It’s tempting to file without reading and reviewing your return, but don’t skip this step — it’s vital to make sure you file a complete and correct business tax return.

Reading your return accomplishes two very important things:

1. It helps you understand your business tax return, including your overall business success and how various items, such as depreciation, affect your tax bill.
2. It makes it easy to identify any missing information or anything that doesn’t look quite right.

If you don’t trust that you’ll catch everything by doing a manual review, be sure to take advantage of the TaxAct Alerts feature. Alerts can identify missing or incomplete information that may bring your income tax return to the attention of the IRS. Plus, you’ll be alerted to possible tax-saving opportunities that you may have missed.

Following these tips to prepare and file your business tax return should help you get it out the door before the extension deadline. Better yet, now that you’re organized and are keeping good notes, next year’s taxes should be even easier. From now on, you may be able to file your business returns earlier in the year — perhaps without needing an extension at all.

This article is for informational purposes only and not legal or financial advice.

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