We have very often noticed that a lot of times, businesses need some extension time to file their tax for the financial year. Not only that, but in many cases, the business does not know how to file for this tax extension, and hence it becomes much more problematic than expected. From a professional point of view, we can say that applying for a business tax extension is not the ideal thing to do. However, even if you need the extension, try to ensure you do not stretch it out for long.
We have noticed that most owners usually file business tax extensions by filling out Form 7004. We always suggest that before you sit down to file the business extension, it is very important that you talk with your finance team and understand how much more time is required so that you can file out the taxes for the financial year. Not only that, if you want to fill out Form 7004, then make sure you know complete knowledge of the same.
Due Dates For Filing of the Taxes
Now that we have understood that, as a business, you can fill out for business tax extension, we must let you know the details of the due dates. If you think you cannot meet the deadlines, you can apply for a business tax extension.
- S Corp: If your business has been deemed as an S-Corp organization, then as per the latest details, the deadline for filing the taxes is set on the 15th day of the 3rd month at the end of a financial year.
- C Corp: In the case of a business deemed a C-Corp organization, the deadline has been set on the 15th day of the 4th month after the end of the financial year.
Finally, you also have to keep in mind that if the business is deemed a partnership business, then, in that case, you need to file by the 15th day of the 3rd month, which happens after the end of the tax year. If you notice that you cannot fill out the Tax form by the stipulated time frame, make sure you apply for the business extension on time. If you fail to do so, in most cases, there will be legal penalties, which will not be promising for your business.
Filling Out The Business Tax Extension
For many businesses, it might be very confusing to fill out the business tax extension; hence we are here to give you complete guidance on the same.
Step 1: The first thing that you need to do is assess which form is appropriate for you. This usually depends on the type of business proprietorship that you own. You will need to fill out Form 4868 or Form 7004. If you are a business with a sole proprietorship or only one owner, you must fill out form 4868. For those multi-member businesses, you need to fill out Form 7004.
Step 2: The next thing you need to do is read out the instructions and fill out the form depending on your business and when you will be able to finish the filing. In our opinion, this particular step is very important as it will give you a complete insight into the details you need to mention and can also avoid all the errors.
Step 3: Once you have filled out the required form, you will notice that the approval is usually automatic; however, in some cases, there can be exceptions. It is very important to ensure that you take guidance from professionals in case you are confused and need complete assistance on the same. Step 4: Finally, once the form has been approved, you will notice that you will get a business extension, typically for six months. In most cases, the IRS will not allow you to go beyond this for pertinent reasons. However, at the same time, some exceptions are made, and this is usually for businesses that operate in foreign countries. There could be logistical issues.
The Final Wrap
Small and midsize firms, as well as bigger corporations, can file after the April 15 deadline by requesting an extension, much like with individual tax returns. Although an extension won’t give you more time to pay the money you owe, it will give you more freedom to complete all the details of your tax return.
Thinking through tax consequences early and comprehending the filing requirements are essential to avoiding penalties for underpaying your tax obligation, regardless of whether you are a lone owner, a partner in a small to midsize firm, or an employee of a bigger corporation.
It is very important to make sure that you fill out a business form extension and make sure that you do not falter in the same. At Profit Jets, we can give you complete guidance on the same, and all you need to do is contact us!