Episode 157: Learn how to file a tax extension with the IRS and tips for filing a business tax extension or personal tax extension.
If you’re running a business, filing an extension for your business taxes is really easy. It’s a few questions, a quick submission, and gives you a six-month extension.
Reasons to Apply for a Tax Extension
Filing a tax extension buys you time and can be done for both your business and personal taxes. This is ideal if you need time to find a new accountant or think there might be potential delays that could put you beyond the March deadline.
One of Kevin’s friends files for an extension every year, whether he’s going to use it or not. You don’t get penalized for filing an extension, and the sooner you do it the better.
Forms Needed for a Tax Extension
The forms you need from the IRS will depend on the type of extension you’re applying for. The forms will differ based on whether you’re applying for a personal or business tax extension, and what your business structure is.
IRS Form 4868 – Sole proprietor, Single-member LLC, Partnership, Multiple Member LLC, S Corporation (owner), personal tax return extension.
IRS Form 70004 – Partnership, Multiple Member LLC business, S Corporation (business extension), Corporation, general business extension.
You can file either of these forms online in under half an hour.
Important Tips for Getting a Tax Extension
The most important thing to remember is that an extension on filing doesn’t mean an extension on payment— if you owe, you could be charged a late payment fee even if you aren’t charged a late filing fee. You may need to estimate what you owe.
All IRS extensions are approved EXCEPT if you make an error on your application. Be careful when submitting your application to ensure that it’s accurate.
Remember, only one extension is allowed each year and, depending on your state, you may have to file both a state and federal extension application.