How and When to File an Extension on Business Taxes

If you can't complete the tax return for your business by the filing date, you can request an extension of time to file. This article discusses how and when to file, what form to use, and other important information about extensions.

Some Important Points about Extension Applications

• There is only one extension allowed per tax year. You can't get multiple extensions. 
• The extension is automatic for both types of extensions (personal or business). Just be sure to file the extension by the tax due date.
• Even if you don't owe any tax, file an extension if you can't file your return by the due date.
• If you aren't sure how much to pay when you file your extension application, you can run a calculation of estimated tax due. (Don't forget to include self-employment tax on business earnings as part of your calculation!)
• You may also have to file an extension application with your state. Check with your state's taxing authority (state department of revenue or another similar title) to learn about the process for filing an extension for a state tax return.
• The IRS doesn't reject many extension applications. The most common reason an application is rejected is because of an error. Check to make sure you have filed the extension application correctly.

Business and Personal Tax Returns and Estimated Tax

Most business owners pay tax on their business income through their personal tax returns. These are called "pass-through taxes," because the tax liability passes through to the owner.

In these cases, business owners have a special schedule included with their 1040 form showing business income. For sole proprietors and single-member LLC owners, that's Schedule C. For partners, multiple-member LLC owners, and S corporation owners, that's Schedule K-1.

In addition, partnerships, S corporations, and corporations must file a business tax return and a separate extension application for it.

Business Tax Extensions: A Chart

Here are details on extension applications for specific business types:

• Sole proprietorship and single-member LLC tax returns, filed on Schedule C and included with the owner's personal tax return, are due on April 15 for the previous tax year. If you want an extension, you must file the extension application for a Schedule C and personal return by the tax return due date of April 15.

• Partnership tax returns are due on 15th day of the third month after the end of the partnership's tax year (a month earlier than previously). Since most partnerships have a December 31 year-end, partnership tax returns and extension applications are due March 15 of the following year.
• S Corporation tax returns are due the 15th day of the third month after the end of the company's fiscal (financial) year. All S corporations have a December 31 year-end, so the due date for the extension application is March 15.
• C Corporation tax returns are due on the 15th day of the fourth month after the end of the fiscal year. For corporations with a December 31 fiscal year-end, the extension application is due April 15.

Extension Application Forms and Filing Online

The extension application form you use depends on your tax return type:

For personal tax returns, use Form 4868 to file an extension application. These include sole proprietors, partners, LLC owners, and S corporation owners.

For business tax returns for partnerships, S corporations, and corporations, use Form 7004 to file an extension application.

You can file an extension application online or through your business tax software or your tax preparer. You can also get an extension by paying all or part of your estimated income tax due and indicating that the payment is for an extension using Direct Pay, the Electronic Federal Tax Payment System (EFTPS), or a credit or debit card. This way, you won’t have to file a separate extension form, and you will receive a confirmation number for your records.

When Extended Tax Returns Are Due

The IRS sets different automatic extension times for different types of returns. The deadlines are for months after the original tax return due date for each business type. Due dates' extensions are:

• 6 months for partnership returns (including multiple-member limited liability companies filing as partnerships). For a partnership with a December 31 year-end, the extended tax return is due September 15.
• 6 months for S-corporation returns. For all S corporations, the extended tax return is due September 15.
• 6 months for corporation returns. For a corporation with a December 31 year-end, the extended tax return is due October 15.
• 6 months for sole proprietorships, who are filing Schedule C along with their Form 1040, and for single-member limited liability companies filing as sole proprietors. For sole proprietors, all of whom have a December 31 year-end, the extended tax return is due October 15.

If your corporation or partnership does not have a December 31 fiscal (financial) year-end, you will need to calculate the number of months for the tax return due date, then add the number of months for the extension. For example, for a September 30 year-end for a corporation, the corporate tax return is due February 15 of the following year, and the extended tax return is due August 15 of that year.