Corporations and partnerships can use Form 7004 to get more time to file their business tax returns.
- The Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns application is commonly known as Form 7004.
- Corporations and partnerships can complete Form 7004 to receive a six-month extension on filing their tax return.
- Form 7004 only extends the due date of filing tax returns, not the due date of tax liability payment.
If your small business is filing as a partnership or corporation, you can request an extension by filing an Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns application, also known as Form 7004.
Although it is possible to extend the deadline for filing your business tax returns, there are a few guidelines you should be aware of.
First, the extension only pertains to your tax return; you are still responsible for paying any business taxes you owe on or before your original tax return due date. Second, if you are unsure of what those tax numbers will be, you are still responsible for paying the estimated income tax amount. It is crucial that you estimate this number as accurately as possible, since underpaying can result in penalties from the IRS.
Can I get an extension on my business taxes?
Yes, corporations and partnerships can get an extension for filing their business tax returns; however, they cannot get an extension for paying their business tax liability. Daniel Henn, CPA, PA, author of The No Holds Barred Candid Talk About Small Business Success in Florida, said that late-payment penalties and interest rates begin to accrue from the original due date. If you need an extension to file your business tax return, file Form 7004 as soon as possible.
It is often advised that you work with a certified professional to file tax documents for your business. "If you use a professional for the filing of your business returns and related extensions, verify that the extension was filed and request proof," Henn told business.com. "This is one area that is very difficult to prove reliance on a tax professional to get penalties removed."
What is Form 7004?
Form 7004 is an IRS tax form that corporations and multiple-member LLCs filing as partnerships can file to extend the due date of their tax return. This form needs to be filled out correctly and submitted on time for an extension to be warranted.
"The extension period is typically six months; however, certain filers, such as Form 1041 and Form 1120 filers with fiscal tax years ending June 30, will have an extension period of five and a half months and seven months, respectively," said Jessica L. Smith, an enrolled agent at Slate Law Group. "Several entities are eligible to use this form, but the most common business entities include Form 1065 [for] partnerships, Form 1120 [for] C corporations, Form 1120-S [for] S Corporations, and Form 1041 [for] trusts and estates."
Additionally, Henn said businesses can use Form 7004 in relation to Form 1042 (Annual Withholding Tax Return for U.S. Source Income of Foreign Persons) and various forms related to excise tax reporting and withholding.
Businesses that file Form 7004 are still required to pay the expected tax liability on or before the original due date of the tax return. "The failure-to-file penalty is calculated at a maximum of 25% of the unpaid tax liability, so it is recommended that the entity pay the tax liability in full or pay what they are able by the original due date of the tax return," said Smith.
Where do I file Form 7004?
You have two options: You can file Form 7004 online or mail it to the IRS. Smith recommended e-filing. If you are using a tax professional to file your request for an extension, they will likely utilize tax software with e-file capabilities.
If you are unable to file Form 7004 online, there is a PDF version of the form you can print, fill out and mail to the IRS. Your entity type and location determine which IRS location you need to mail your form to, so follow the IRS' specific instructions on how to properly file.
"We always recommend mailing them via certified mail (e.g., USPS) to prove the date of mailing," said Henn. "This is your get-out-of-jail-free card when you are dealing with due-date sensitive forms and filing with the federal (or state) government. The IRS has been known to misplace documents from time to time."
Make a note on the certified mail green tear-off slip of what you sent so you can identify which certified mail receipt goes with which form you filed. Regardless of which way you file the extension, submit it prior to the due date of the tax return.
Business tax deadlines and extensions
The type of business you are filing for will determine which return you must use. For example, if you are a corporation or multimember LLC filing as a partnership, you will likely be required to complete Form 1120, Form 1120-S or Form 1065. To extend the filing deadline for one of these forms, follow the guidelines on Form 7004.
Tax return due dates vary. Smith listed the following due dates as a general guideline:
U.S. Corporation Income Tax Return (Form 1120)
- Form 1120 with calendar year-end are due April 15th
- Form 1120 with a fiscal year-end are due by the 15th day of the fourth month following the close of the tax year
U.S. Income Tax Return for S Corporation (Form 1120-S)
- Form 1120-S with calendar year-end are due March 15th
- Form 1120-S with a fiscal year-end are due by the 15th day of the third month following the close of the tax year
U.S. Return of Partnership Income (Form 1065)
- Form 1065 with calendar year-end are due March 15th
- Form 1065 with a fiscal year-end are due by the 15th day of the third month following the close of the tax year
U.S. Income Tax Return for Estates and Trusts (Form 1041)
- Form 1041 with calendar year-end are due April 15th
- Form 1041 with a fiscal year-end are due by the 15th day of the fourth month following the close of the tax year
An extension of six months (generally) will be granted for these entities if they properly complete Form 7004 and pay their estimated tax (if applicable) by the due date of the return for which the extension is requested. The IRS will not notify you that your extension has been approved. They will only send notifications if they are denying a request for an extension.
There are a few deadline extension exceptions that may apply for certain entities filing Form 1041 (five and a half months) and for C corporations with tax years ending June 30th (seven months). Be sure to check with the guidelines on Form 7004 to see what deadline extension your business qualifies for, and don't forget to check with state extensions you may be required to apply for as well.