How to File a Business Tax Extension: Deadlines, Forms, and Penalties

Are you a business owner who filed an extension this past tax season? Don’t worry, you’re not alone! Filing a business tax extension can give you the breathing room you need to get your finances in order. But, where do you even start?

In this article, we’ll walk you through the process of filing a business tax extension using Form 7004, including:

• Who can file an extension
• Key deadlines for S-corps, C-corps, and partnerships
• How to estimate your tax liability (and avoid penalties)
• What to expect after you file your extension
• How to avoid common mistakes and penalties

Key Takeaways

• Most business tax returns can be extended by filing Form 7004.
• If you need an extension, check with your state taxing authority to see if you need to file one with them as well.
• If your business is an S corporation or partnership and is a calendar-year taxpayer, your income tax return or extension is due by the 15th day of the 3rd month after the end of your tax year.
• If your business is a C corporation and is a calendar-year taxpayer, your income tax return or extension is due by the 15th day of the 4th month after the end of your tax year.

What is a Business Tax Extension?

A business tax extension is a request to the IRS to extend the deadline for filing your business tax return. This can give you an extra 6 months to file your return. However, this is not an extension to pay any taxes you owe and doesn’t excuse you from making estimated tax payments throughout the year.

Who Can File a Business Tax Extension?

Most business entities can file a tax extension using Form 7004, including:

• S corporations
• C corporations
• Partnerships
• Limited liability companies (LLCs) taxed as partnerships or S corporations
• Trusts
• Estates

How to File Form 7004

Filing Form 7004 is relatively straightforward. Here’s what you need to do:

1. Gather your business information, including your EIN, business name, and tax year end date.
2. Determine your tax liability. You’ll need to estimate how much you owe in taxes for the current year. You can use last year’s return as a rough estimate.
3. Fill out Form 7004. You can download the form from the IRS website.
4. Sign and date the form. Make sure to sign and date the form as the authorized representative of your business.
5. Attach any required documentation. You may need to attach a copy of your first-quarter estimated tax payment voucher or other supporting documentation.
6. File the form. Mail or e-file Form 7004 by the original due date of your return.

What Are the Key Deadlines?

The due dates for filing a business tax extension vary depending on your business entity and tax year. Generally, here are key deadlines to keep in mind:

Business Entity	Tax Year	Due Date	Extended Due Date
S corp	2024	March 15, 2025	September 15, 2025
C corp	2024	April 15, 2025	October 15, 2025
Partnership	2024	March 15, 2025	September 15, 2025

When to File a State Business Tax Extension?

State guidelines for filing extensions vary. In many cases, if you don’t owe state taxes, your federal extension can also extend your state return(s). However, it’s always a good idea to check with your state taxing authority to confirm their specific requirements.

How to Estimate Your Tax Liability?

Estimating your tax liability can be a challenge, especially if you’re a new business or have experienced significant changes in income or expenses. Here are some tips to help you make an accurate estimate:

• Use last year’s return as a benchmark. If your business has remained relatively stable, you can use last year’s return as a rough estimate of your current-year tax liability.
• Consult with a tax professional. A tax expert can help you navigate any changes in your business and provide a more accurate estimate of your tax liability.

What Happens After You File Your Extension?

Once you’ve filed your extension, you can breathe a sigh of relief – but only for a little while! Here’s what to expect next:

• Pay any estimated taxes due. You’ll still need to make estimated tax payments throughout the year or with your extension even if you’ve filed an extension.
• File your return by the extended due date. Make sure to file your return and pay any remaining taxes by the extended due date to avoid additional penalties and interest.
• Keep records of your extension. It’s essential to keep a copy of your filed extension and any supporting documentation in case the IRS requests it.

Avoid Common Mistakes and Penalties

Here are some common tax extension mistakes to avoid:

• Missing the extension deadline. If you miss the deadline to file your extension, you may face additional penalties and interest on your unpaid taxes.
• Underestimating your tax liability. If you underestimate your tax liability, you may face penalties and interest on the underpaid amount.
• Not making estimated tax payments. If you don’t make estimated tax payments throughout the year, you may face penalties and interest on the underpaid amount.

TurboTax Tip: Even if you file an extension, you need to estimate how much you owe (if you owe). Then, you need to send in that amount by the original due date. Use our Business Tax Estimator to get an accurate estimate of your tax liability.

Wrapping Up

Filing a business tax extension offers valuable time to organize your finances, but remember that the payment deadline remains. Understanding the requirements of Form 7004 and the specific deadlines for your business structure is essential for a smooth process. TurboTax has your back with tools and guidance that can assist you in estimating your tax liability and navigating the extension process. Get started now!