Here’s what HIVE AI had to say about “Can I file an extension for my business tax return, and how?”:
Filing an Extension for Your Business Tax Return
Yes, you can file an extension for your business tax return. This gives you additional time to file your return, though it’s important to note that an extension of time to file is not an extension of time to pay any taxes due.
How to File an Extension for Your Business
The primary method for requesting an extension for most business entities is by filing Form 7004, “Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns.”
Note: You must file your request for extension by the due date of your return. See instructions before completing the form. IRS – Form 7004: Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns
Businesses that need more time must file Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns. IRS Newsroom – IR-2022-112
Extension Periods by Business Type
The length of the extension varies depending on your business entity type:
C Corporations
An extension of 6 months for filing income tax returns imposed by subtitle A shall be allowed any corporation if, in such manner and at such time as the Secretary may by regulations prescribe, there is filed on behalf of such corporation the form prescribed by the Secretary, and if such corporation pays, on or before the date prescribed for payment of the tax, the amount properly estimated as its tax. IRC § 6081(b)
However, there are special rules for certain C corporations: In the case of any return for a taxable year of a C corporation which ends on December 31 and begins before January 1, 2026, the first sentence of this subsection shall be applied by substituting “5 months” for “6 months”. IRC § 6081(b)
In the case of any return for a taxable year of a C corporation which ends on June 30 and begins before January 1, 2026, the first sentence of this subsection shall be applied by substituting “7 months” for “6 months”. IRC § 6081(b)
S Corporations and Partnerships
For S corporations and partnerships, filing Form 7004 generally provides a 6-month extension.
Any election under this subsection for any taxable year shall be made on or before the due date (including extensions) of— (I) in the case of a qualified small business which is a partnership, the return required to be filed under section 6031, (II) in the case of a qualified small business which is an S corporation, the return required to be filed under section 6037, and (III) in the case of any other qualified small business, the return of tax for the taxable year. IRC § 41(h)
Electronic Filing Options
The following application for automatic extension of time to file forms can be e-filed through the MeF System and are processed by the Ogden Submission Processing Campus (OSPC):
- Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns
- Form 8868, Application for Automatic Extension of Time to File an Exempt Organization Return IRS IRM 3.42.4 IRS e-file for Business Tax Returns
The IRS urges anyone needing the additional time to make their request electronically. Several electronic options are available. Visit IRS.gov/extensions for details. IRS Newsroom – IR-2022-112
Important Considerations
Payment Requirements
To satisfy the requirements, an employer, other person or health plan must— (1) Submit a complete application on Form 7004, “Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns,” or in any other manner prescribed by the Commissioner; (2) File the application on or before the date prescribed for filing the return with the Internal Revenue Service office designated in the application’s instructions; and (3) Remit the amount of the properly estimated unpaid tax liability on or before the date prescribed for payment. Tresuary Reg. 54.6081-1
Penalties for Late Filing
In case of failure to file any return required under authority of subchapter A of chapter 61 on the date prescribed therefor (determined with regard to any extension of time for filing), unless it is shown that such failure is due to reasonable cause and not due to willful neglect, there shall be added to the amount required to be shown as tax on such return 5 percent of the amount of such tax if the failure is for not more than 1 month, with an additional 5 percent for each additional month or fraction thereof during which such failure continues, not exceeding 25 percent in the aggregate. IRC § 6651(a)
A taxpayer is not liable for an addition to tax for failure to timely file or failure to timely pay if she shows the untimeliness or failure is due to reasonable cause and not due to willful neglect.
“If the taxpayer exercised ordinary business care and prudence and was nevertheless unable to file the return within the prescribed time, then the delay is due to a reasonable cause.”
The taxpayer can show that she did not act with “willful neglect” if she can “prove that the late filing did not result from a ‘conscious, intentional failure or reckless indifference.'” Niedringhaus v. Commissioner, 99 T.C. 202, 221 (1992) (quoting United States v. Boyle, 469 U.S. 241, 245-246 (1985)). Dawson U.S. Tax Court Opinions: Salina Jivani Dawson U.S. Tax Court Opinions: Salina Jivani Dawson U.S. Tax Court Opinions: Salina Jivani
Extension is for Filing Only, Not Payment
For purposes of this subsection, the last day prescribed for filing the return or paying the tax shall be determined without regard to any extension of time granted the taxpayer and without regard to any election to pay the tax in installments. IRC § 6513(a)
This means that while you can get an extension to file your return, you still need to pay any taxes due by the original deadline to avoid penalties and interest.
Special Cases
Foreign Corporations
To request an extension of time to file, a foreign corporation files Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns, on or before the return due date.
A foreign corporation is considered a taxpayer abroad within the meaning of IRC 6081(a) and therefore may request an extension beyond the standard six months provided when filing Form 7004. IRS IRM 21.8.2 BMF International Adjustments IRS IRM 21.8.2 BMF International Adjustments
Joint Extensions for Married Business Owners
Joint extension requests apply equally to each spouse, even if they subsequently file separate returns. IRS IRM 20.1.2 Failure To File/Failure To Pay Penalties
Employment Tax Returns
There are no regulations covering an extension of time to file employment tax returns. Therefore, these returns do not qualify for an extension of time to file. However, no penalty for filing late is asserted if the taxpayer paid (For example, via Federal tax deposits, and so on) 100 percent of the tax required to be paid on or before the due date for payment. IRS IRM 20.1.2 Failure To File/Failure To Pay Penalties
Conclusion
Filing an extension for your business tax return is a straightforward process that provides you additional time to prepare and file your return. Remember to:
- File Form 7004 by your original tax return due date
- Pay any estimated taxes due by the original deadline
- Use electronic filing options when possible
- Be aware of the specific extension period for your business type
This extension gives you breathing room to gather all necessary documentation and ensure your return is accurate, but it doesn’t extend the time to pay any taxes owed.
Sources:
- IRC § 6081(b)
- IRS Form 7004: Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns
- IRS Newsroom – IR-2022-112
- IRS IRM 3.42.4 IRS e-file for Business Tax Returns
- IRS IRM 20.1.2 Failure To File/Failure To Pay Penalties
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