Your Guide to Filing a Business Tax Extension
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Updated for tax year 2023.
Do you need more time to file your business return this year? No sweat — that’s what tax extensions are for. Read on to learn more about filing for a business tax return extension this year.
What is a business tax extension?
Sole proprietorships, partnerships, LLCs, and corporations can file a six-month business tax extension request with the IRS to receive extra time to complete their income tax return without penalty. Which request form you need to file depends on your business structure:
- Sole proprietorships and single-member LLCs use Form 4868.
- Partnerships, multi-member LLCs, and corporations use Form 7004.
Generally, the extension period is automatic if you file your request by the due date. To submit your form, you can request an extension online (TaxAct® can help you do this when you e-file with us) or submit an extension request by mail.
What is the filing deadline to request a business tax extension?
The deadline for filing a business income tax extension request also depends on what type of business you have:
- Sole proprietorship, multi-member LLCs, and corporate returns must be filed by April 15 for the 2023 tax season. The new due date of the return with an extension is Oct. 15, 2024.
- Partnerships and S corporations have an earlier deadline, March 15. The new deadline with an extension is Sept. 16, 2024.
Does a business extension give me more time to pay my small business taxes?
No, filing an extension only gives you more time to complete your business tax return. You still need to pay any outstanding tax due by the April 15 deadline (March 15 for partnerships and S corporations). Failing to pay all or some of your tax liability can result in penalty and interest charges.
How do I calculate the estimated tax I need to pay?
If you’re unsure what estimated tax you owe, check out our Calculating and Paying Quarterly Estimated Taxes page for some assistance. If your tax situation hasn’t changed much, one solution is to approximate your numbers from a previous year’s return. The IRS also provides helpful calculation worksheets covering many different taxpayer scenarios. When in doubt, it is in your best interest to overpay rather than underpay to avoid being charged any interest and penalties for any unpaid tax debt. If you pay more tax than you owe, you will be able to reclaim it as a tax refund.
Are there any benefits to filing a business tax extension?
Small business owners or self-employed individuals with SEP IRAs may find it beneficial to file a business tax extension because it extends the time you have to contribute to your plan. If you’re unfamiliar, a SEP-IRA is a variation of an IRA built for sole proprietors, freelancers, or any other small business owners. If you are self-employed and have one of these funds, make any additional deposits before the Oct. 16 extended deadline. And don’t forget to update your federal tax return based on your contributions. Remember — you’re funding your account for the previous tax year, not this year.
When should I file a tax extension?
If you need more time to file for any reason — whether you are still waiting on certain tax documents, had a family emergency come up, or simply procrastinated too long — don’t hesitate to file an extension. You don’t have to convince the IRS of anything, and the extension is automatic. So, if you need more time, just ask for it!
When shouldn’t I file a business tax extension?
If you need more time to pay your taxes owed, an extension will only give you more time to file, not more time to pay. Instead, the IRS has debt relief options available for any taxpayers struggling to make tax payments. Read our article on how to set up an IRS payment installment agreement that can split up your bill into more manageable monthly payments. In certain situations, you’ll automatically qualify for an extra six months to file and do not need to request an extension. These exceptions are:
- You (or your spouse) are working in a combat zone for the U.S. Armed Forces
- You are a member of the military serving abroad
- You are a U.S. citizen living and working outside the country
- You are a U.S. citizen residing in a part of the country affected by a severe natural disaster
What information will I need to file my business extension request?
Form 7004 has been simplified and now consists of two parts:
- Part I lists all the tax forms you could be requesting an extension for, along with a different code for each return. If you need to request an extension for more than one type of return, you’ll need to submit separate 7004 forms.
- Part II asks for basic information about your business, such as your business structure, location, and the dates of your calendar and tax years. You’re also asked to estimate your tentative total tax and include your total payments and tax credits.
How do I file a tax extension for my business?
TaxAct makes it simple to file Form 4868 or Form 7004.
For Form 4868:
- From within your TaxAct return, click Filing on the left to expand, then click File Extension.
- Continue with the interview process to enter all the appropriate information.
- On the screen titled Filing Extension Step – Extension Options, you will have the option to either print or e-file your federal extension only. State extensions can be printed later in the interview process.
If you have any questions or need further details on filing Form 4868 with TaxAct, read our Form 4868 help topic.
For Form 7004:
- Click the Filing tab within your TaxAct return (Online or Desktop).
- Under Filing, click File Extension and continue as applicable to your required filings.
- The program will continue with the interview questions to help you complete the required information for an extension request.
For more detailed information about filing Form 7004, reference the IRS instructions for Form 7004.
What should I do after filing my business tax extension?
Though you now have an extra six months to file your return, please don’t put it off until the last minute! Try to complete your return as soon as possible while the last tax year is still fresh in your mind. Don’t forget to make any necessary retirement plan contributions for the previous tax year as well.
Do I need to file a business extension for my state return?
Certain states will allow an accepted federal Form 7004 or 4868 as an extension of time to file your state return, while other states require a separate extension request. TaxAct will provide information about state filing requirements during the extension interview portion of the e-filing process.
Can I also get an extension for my personal tax return?
Yes! Learn more about filing a federal individual tax return extension in this article.
This article is for informational purposes only and not legal or financial advice.
All TaxAct offers, products and services are subject to applicable terms and conditions.
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