Business Tax Extension
Everything You Need to Know about United States business tax extension
What is a Business Tax Extension?
Business Tax Extension, commonly known as IRS Form 7004, is used to request a six-month extension time from the Internal Revenue Service (IRS). Whether you are a small business or corporation, you must file your tax return on or before the deadline. If you are unable to meet the IRS deadline, you can request additional time for tax preparation. It’s important for businesses to understand that a tax extension does not postpone the deadline for paying taxes owed. While the extension grants additional time to prepare and file the required documents, any taxes due must still be paid by the original deadline.
Why Consider Filing a Business Tax Extension?
Filing a tax extension offers several advantages,
Avoid Late Filing Penalties
If your business needs additional time to gather important information or documents, filing business tax extension secures you from penalties.
Avoid Error Filing
If you are unsure about your financial information, the extension gives you time to assess your financial status and ensure your filing is accurate.
Complex Tax Situations
Large corporations may have multiple revenue systems. In that circumstance, they may require additional time to prepare returns.
Penalties for Late Submission
If you fail to file either a tax extension or return by the appropriate filing deadline(March 15th for businesses and April 17th for individuals), the IRS may assess interest charges on any unpaid federal taxes owed, as well as impose a failure-to-file penalty. The IRS may impose a failure to file penalty of up to 5 percent per Month, or part of a Month, of the taxes due, up to a maximum of 25 percent of the total tax due. If your tax return is more than 60 days late, the minimum penalty is $135 regardless of whether you owe taxes or not. The sooner you file either a tax extension or return, even if you can only pay a portion of the tax owed, the less likely you are to incur penalties from the IRS.
Who Can File a Business Tax Extension?
Any business entity, including corporations, partnerships, LLCs, and sole proprietors, can apply for a tax extension. Depending on your business type, you’ll need to file one of the following forms:
- Form 7004: For corporations, partnerships, and multi-member LLCs.
- Form 4868: For sole proprietors or single-member LLCs filing as individuals.
Essential Things to Consider When Filing a Business Tax Extension
In just minutes, you could receive an automatic 5-1/2 or 6-Month tax extension for your business. Below, we will explain the quick and easy steps to file your Form 7004 using our services to extend your tax deadline.
Step 1
In just minutes, you could receive an automatic 5-1/2 or 6-Month tax extension for your business. Below, we will explain the quick and easy steps to file your Form 7004 using our services to extend your tax deadline.
Step 2
Estimate the total income tax payment for the filing year, and provide the amount already paid to the IRS through quarterly payments if applicable. Many business customers simply multiply their profits by last year’s tax rate to estimate the total tax liability for the year. If you expect to owe, and want to make a tax payment to avoid potential IRS interest and late payment penalties, we can help you make that payment directly to the IRS via Electronic Funds Withdrawal from your business bank account (EFT).
Step 3
Once you submit your business tax extension with Tax2efile, we will electronically E-file it to the IRS for approval. Tax2efile is an authorized IRS E-file provider which means your data, and our transmission to the IRS, is safe and secure.
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