What Is the Deadline for a Business Tax Extension?

A business tax extension provides additional time to submit tax filings to the Internal Revenue Service (IRS). This extension only moves the filing deadline and does not grant more time to pay any taxes owed. Failing to pay by the original deadline can result in penalties and interest charges, even with an approved filing extension.

Key Extension Deadlines by Business Type

For partnerships filing Form 1065 and S corporations filing Form 1120-S, the initial due date is March 15. These entities must file for an extension by this date, which moves their filing deadline to September 15. This six-month extension allows for additional time to complete the return.

For C corporations, which file Form 1120, the tax deadline is April 15. A request for an extension must be submitted by this date, which moves the new deadline to October 15.

Sole proprietorships and single-member LLCs report business income on Schedule C of their personal Form 1040. Their deadline aligns with the individual tax deadline of April 15. Filing for an extension pushes their filing deadline to October 15.

Information and Forms Needed for a Federal Extension

To secure a federal tax extension, most business types must use Form 7004. This form covers entities such as partnerships, multi-member LLCs, C corporations, and S corporations. Sole proprietors and single-member LLCs use Form 4868, the same form used for personal tax extensions.

Before completing the form, a business must gather specific information, including its legal name, mailing address, and Employer Identification Number (EIN). For sole proprietors using Form 4868, a Social Security Number (SSN) is used instead of an EIN. The form also requires the identification of the specific tax return for which the extension is being requested by using a form code found in the instructions.

A part of the extension request is the calculation of the total estimated tax liability for the tax year. This requires the business to make a reasonable projection of its total income, subtract expected deductions and credits, and apply the relevant tax rates to estimate the total tax bill. From this total, any estimated tax payments already made and any applicable tax credits are subtracted to determine the balance due. This final amount must be paid with the extension request to avoid penalties.

How to Submit Your Extension Request

There are two primary methods for submitting the extension request. The most common method is electronic filing through IRS-approved tax software or a tax professional. This provides quick confirmation that the IRS has received the request.

Alternatively, businesses can mail a paper copy of the extension form. It is important to use the correct mailing address, which can be found in the instructions for the specific form. When mailing, using certified mail is a good practice as it provides proof of the mailing date.

Any estimated tax payment due must be submitted by the original tax deadline. Payments can be made electronically through systems like IRS Direct Pay or the Electronic Federal Tax Payment System (EFTPS). If filing a paper extension form by mail, a check or money order can be included, payable to the “U.S. Treasury.”

State Tax Extension Considerations

Filing for a federal tax extension does not automatically grant an extension for state tax obligations, as the rules for state extensions vary significantly. Some states offer an automatic extension to any business that has been approved for a federal extension, requiring no separate state filing. In these cases, attaching a copy of the federal extension approval to the state return when it is eventually filed is often sufficient.

Other states mandate that a business file a separate, state-specific extension form. These forms and their deadlines may differ from the federal requirements. Missing a state’s separate extension deadline can lead to late-filing penalties at the state level, even if a federal extension was properly filed.

To ensure compliance, business owners must verify the specific requirements of the state or states where they have a filing obligation. The most reliable source for this information is the state’s department of revenue or tax agency website.

Consequences of Missing Filing Deadlines

Failing to file a tax return or an extension by the deadline can lead to financial penalties from the IRS. The two primary penalties are for failure to file and failure to pay, and their costs and calculations differ.

The failure-to-file penalty is assessed when a business does not file its return by the due date, including any extensions. This penalty is calculated as 5% of the unpaid taxes for each month or part of a month that the return is late. The penalty is capped at 25% of the outstanding tax liability, and it can be substantially more than the penalty for not paying on time.

The failure-to-pay penalty applies when a business does not pay the taxes it owes by the original deadline. This penalty is 0.5% of the unpaid taxes for each month or part of a month the tax remains unpaid, also capped at 25% of the unpaid tax. If both penalties are applied in the same month, the total penalty is limited to 5%, with the failure-to-file portion being reduced.