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Business Tax Extensions: What You Need to Know

Tax season can be a stressful time for small business owners. But there’s perhaps nothing more stressful than eying down the finish line and realizing: “I’m not going to make it.”

Fortunately, just like individual taxpayers, small businesses can keep the clock running by filing a tax extension. Here’s what you need to know if you’re in that situation.

The most important thing to remember is that tax extensions are tax filing extensions — not tax paying extensions. Even if you apply to have your filing date pushed back, you’re still going to have to estimate whether you need to pay, and if so, send in that payment by your particularly business’s original tax deadline.

The Process

The process for getting an extension is actually pretty straightforward and only involves a few steps. We’ll start by listing those steps, then we’ll go into a little more detail about deadlines, forms and other information you’ll need.

  1. Estimate taxes owed (if any). Again, when you file for a tax extension, you’re only requesting more time to file your taxes. But you still must pay the IRS by the filing deadline or face penalties and additional interest owed.
  2. Fill out and submit the proper small business tax extension form by the deadline applicable to your business.
  3. Pay estimated business taxes owed (if any).
  4. File your business tax return by the new due date.

Tax Forms You’ll Need

The following are some of the most common forms businesses use, both in filing for taxes and asking for a tax extension.

For federal income taxes, businesses typically will use the following forms:

  • Sole proprietors: Form 1040
  • Partnerships: Form 1065
  • C corporations: Form 1120
  • S corporations: Form 1120-S
  • Limited liability corporations (with one member): Form 1040 or Form 1040-SR
  • Limited liability corporations (if a partnership): Form 1065
  • Limited liability corporations (if a corporation): Form 1120

Like with filing federal income taxes, sole proprietors and single-member LLCs use the same form as individual taxpayers filing a tax extension: Form 4868. However, all other business structures should use Form 7004.

Tax Deadlines

The deadlines for both filing an extension and paying anything owed (regardless of whether you’re applying for a filing extension) are, in a normal year:

  • March 15: S corps, LLCs with multiple members, partnerships
  • April 15: C corps, LLCs with one member, sole proprietorships

Similarly, the extended deadlines for businesses are:

  • Sept. 15: S corps, LLCs with multiple members, partnerships
  • Oct. 15: C corps, LLCs with one member, sole proprietorships

We say in a normal year because if the deadline falls on a weekend or a holiday, the tax deadline typically gets pushed back.

For instance, in 2024, Tax Day for individuals, as well some businesses, falls on April 15. Pretty normal. However, if you’re a taxpayer living in Maine or Massachusetts, your federal tax deadline is actually April 17, 2024. Why? Well, in 2024, Tax Day falls on Patriots’ Day, a holiday observed by those two states on the third Monday of April (in this case, April 15). This would normally push the tax deadline to April 16, but April 16 is Emancipation Day in the District of Columbia; as a result, Maine and Massachusetts’ federal tax deadline is pushed back to April 17.

Also worth noting: The deadlines above only apply to businesses that are calendar-year taxpayers. (Sole proprietorships and LLCs with one member, for instance, are almost exclusively calendar-year taxpayers.) If your fiscal year doesn’t line up with the calendar year, the deadlines work like this:

  • S Corps, LLCs with multiple members, partnerships: Returns and extensions are due by the 15th day of the third month after the end of the business’s tax year.
  • C corps: Returns and extensions are due by the 15th day of the fourth month after the end of the business’s tax year.

In virtually all cases, an extension is good for six months after the initial deadline. The exception is corporations with a fiscal year between July 1 and June 30. These companies have a primary deadline of Sept. 15, which is the 15th day of the third month after the end of the business’s tax year, and the extension deadline is Feb. 15, which is only five months after the initial deadline. However, these companies’ schedules will normalize starting with the fiscal year ended June 30, 2027 (to initial and extension deadlines of Oct. 15 and March 15, respectively).

Other Notes

A couple other things to consider if you’re filing a small business tax extension:

  1. You can pay your estimated taxes in a few ways. These include sending a check along with Form 7004, paying via electronic funds withdrawal if you e-file Form 7004, or paying electronically with the IRS via the Electronic Federal Tax Payments System (EFTPS).
  2. Don’t forget to apply for an extension of your state income taxes, too. Rules differ by state, so make sure you check out their deadlines and rules.

Need Help With Your Small Business Taxes?

One way to make sure you’re always on top of your taxes is to hire a tax professional. Accounting pros can help you get organized, keep you on task and on time, and help you build a tax strategy so you don’t have to resort to an annual tax scramble.

You can get all of that and more with McManamon & Co., where our experts provide proactive tax advice that keeps your company on Uncle Sam’s good side.

Forget the stress. Call us at 440.892.8900 or contact us online today.

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