How To File For A Business Tax Extension

Written by J. Hirby and Fact Checked by The Law Dictionary Staff  

Usually, businesses must file their taxes at the end of their business tax years. This time will depend upon the type of company that you are running. If you cannot file at the designated time, you can file for an extension. This is how to file for a Business Tax Extension.

End of Business Tax Year

The end of the business tax year varies by the type of corporation you have. For example, a sole proprietorship tax return might need to be filed by April 15th; a corporation tax return might need to be filed by March 15th. The standard time period for filing is 3 to 4 months after the completion of the business tax year.

Trusts, estates and bankruptcy estates can also qualify for this extension. If an organization is going through restructuring, mergers or acquisitions, then it might make sense to postpone the tax filing until all the paperwork is complete. When another legal process is taking place, then the normal tax schedule might not be easy to follow.

File Form 7004 for Business Tax Extension

A business requesting a tax extension must file Form 7004 entitled “Application for Automatic Extension of Time to File Certain Business Income Tax, Information and Other Returns.” The form has sections for either 5- or 6-month extensions. This form must be filed on the original due date for the business return.

Even with an extension, you must estimate how much you owe and send in that amount by the due date. This is called the “tentative tax.” Be aware that you might be assessed penalties if your estimation is grossly inaccurate.

The business must include its name, address and IRS identification number. Next, list the normal form your company would use for filing its taxes. If you have a short tax year, then explain why that is applicable. Foreign corporations without headquarters in the United States must also clearly note that classification. Finally, fill in the payment amount, date and sign. Make sure to send in your tentative tax with your Business Tax Extension Form.

Each state has its own regulations, but your federal tax extension may apply to your state taxes also.

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