Life happens—to individuals as well as businesses. When circumstances prevent your business from filing by the expected deadline, the IRS has your back. This blog will examine how to file a business tax extension and what that means for your company.
How to File a Business Tax Extension
It is important to know when your returns are initially due, and this date is determined by how your business is organized.
- Sole Proprietorships – April 15th
- Partnerships – March 15th
- Corporations – April 15th
- S-Corporations – March 15th
While you could mail Form 4868 to the IRS, it’s much easier and more immediate to file an extension online. Most tax preparation software suites allow you to file electronic tax extensions, and the IRS gives you a notification that your extension request was received and approved.
While filing for an extension is a simple process, it is important to understand why you need an extension.
Frequently Asked Questions
What is the purpose of filing a tax extension?
Tax-filing extensions are important for businesses that won’t have their return prepared by the filing deadline for their particular form of business organizations. In fact, some businesses incorporate extensions as part of their yearly tax plan.
Do I get penalized for filing a tax extension?
Businesses aren’t penalized for filing a return, but it’s important to remember that an extension gives you extra time to file, not extra time to pay any taxes you owe on the return.
What does filing a tax extension do?
Simply put, it moves the deadline for filing back to September or October, depending on what form your business files. This is usually plenty of time for you to get everything you need together and file when you are ready.
Is approval automatic?
Extensions are automatic, for the most part, as long as the extension form is filled out correctly. You won’t even need to explain why you need the extension.
Reasons to Apply for Tax Extensions
Pandamonium – Q1 is a busy time for many businesses, and if you are filing your business income taxes yourself, the extra time is useful if you are hurried and under pressure. Extra time means a more accurate return.
Missing documents – Not all businesses and individuals are prompt with tax documentation. An extension is helpful when you are missing key 1099s or need additional time to document deductions.
Time to seek professional help – If your business acquired any property in 2020, made investments, or did any number of transactions that would be considered out of the ordinary, your taxes may be more complicated, and you should look for professional help. An extension gives you time to do so.
Always Check With the IRS and With Individual State
Because of COVID-19 and recent events like the Texas blackouts and California wildfires, some deadlines are subject to change. In fact, as of this writing there is a push to have the IRS extend filing deadlines from April 15th to later in the year. 2020 showed us all that we need to remain flexible and expect change, even at a moment’s notice. Residents of Texas and other states that FEMA declared a disaster due to 2021 winter storms now have until June 15th 2021, to file their tax returns. This gives them an extra three months to file for a full extension to October 15th.
For Professional Tax Help, Call Rubino
Our tax advisors work closely with each client to find the best tax plan. With the right partner on your side, you will ensure that you minimize your tax liability and stay compliant, especially if you find you need more time to file. Rubino is your resource for all business tax and tax planning services reach out to us today!