How To File For A Tax Extension
IRS has made a discovery, filing for an extension on your taxes can be hard
. As such, they've recently simplified the process for businesses that are looking to get an extension and file at a later date. An extension means they can postpone filing for up to 6 months, which gives a business owner a lot more time. To qualify, all you have to do is complete the IRS form 7004.
Wait, don't get too excited. It's simplified, not simple. Form 7004 isn't the only type of extension form there is tax payment deferral requires more documentation, as well as form 1138. And, when you're dealing with employee retirement plan reporting, Form 5558 is needed for up to 2.5 months worth of an extension.
Depending on the type of business, a successfully filed 7004 will give you between 5 and 6 months of extension time. For the most part, trusts, estates, and partnerships only receive 5 months. Most other businesses receive a full 6 months.
Yes, when you're just filing for an extension for the tax documentation, you only need to fill out and file Form 7004. You still need to pay the taxes due at the time of filing for the extension, unless you choose to file IRS form 1138 as well.
The Basic Steps of Filing a Tax Extension
Filing your taxes as a business requires a lot of gathering, a lot of reports, an uncomfortable amount of information regarding your financial records, and a whole host of other tax deductible items. Sometimes there just isn't a choice for a business but to file for an extension. Here is a quick step by step to file for an extension.
Note: If you find yourself behind, or confused about what you need to file, acquiring an accountant or tax specialist may be the best way to go. There's no shame in not knowing where to begin, and really, what can you lose by getting some help?
- Make sure you have all of your tax documents such as financial statements, retirement plan contributions, and withholdings. Put all of this in a form, or a specific computer file, for later.
- Identify the business structure. LLC, C-Corporation, etc.
- The hard part; calculate up the probable tax due to the IRS for
that tax year. This may require the help of an expert, if you're not sure how to go about it.
- Get Form 7004 and fill it out, using all of the information you have. No reason has to be given as to why you're filing for an extension.
- Submit form 7004 to the appropriate IRS center, along with payment or deferral forms.
As said before, there are a lot of things to sort through when you file taxes, and there's nothing wrong with having to file for an extension if you need to time to gather information. It happens, but make sure you don't just let it slip by!
by: Inessa Khaykin
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