Filing a Business Tax Extension

Updated for Tax Year 2019


OVERVIEW

Do you need more time to file your 2017 business tax return? Here's what to do.


If you need more time to complete your 2019 business tax return, you can request an extension of time to file your return. However, even with an extension, you must estimate how much you owe (if you owe) and send in that amount by the due date. Otherwise, the IRS can invalidate your extension.

filing business tax extension

Most business tax returns can be extended by filing Form 7004: Application for Automatic Extension of Time to File by the original due date of the return.

Due dates for corporations

If your business is organized as an S corporation, the income tax return or extension is due by the 15th day of the 3rd month after the end of your tax year. If the business is a C corporation then the extension is due by the 15th day of the 4th month after the end of your tax year.

For example, if your C corporation is a calendar year taxpayer with a December 31 year end, you must file a 2019 tax return or extension request by April 15, 2020.

Due dates for partnerships

If your business is organized as a partnership, your income tax return or extension is due by the 15th day of the 3rd month after the end of your tax year. For example, if your partnership is a calendar year taxpayer, with a December 31 year end, you must file a 2019 tax return or extension request by March 15, 2020.

Cautions

The IRS may hit your business with costly penalty and interest charges if you underestimate your taxes, file your return late, or do not furnish certain information by the due date. We assume your business entity is a calendar year taxpayer.

In the event you are a fiscal year taxpayer, please adjust your due dates based on the information provided above. For example, the due date for the tax return of a corporation for the fiscal year ending March 31, 2020 is July 15, 2020.

An exception to this - corporations with a fiscal year from July 1 to June 30, the initial deadline will remain September 15th (15th day of the 3rd month following the end of the fiscal year) and the extention deadline remains February 15 (five months after the first deadline). This exception applies for fiscal years ending through June 30, 2026.  With fiscal years ending June 30, 2027, the filing deadline moves to October 15th (the 15th day of the 4th month following the end of the fiscal year) and the extended deadline moves to March 15th (six months after the first deadline).

S corporations

If your business has always been an S corporation, it is effectively treated as an extension of the shareholders for many tax purposes and will generally not owe any tax itself. However, if your S corporation was once a C corporation, it may owe a corporate-level tax in certain limited situations. An S corporation must provide a Schedule K-1 to all shareholders, detailing their share of the corporation's income and deductions for the tax year.

 

  • In the event your calendar-year S corporation owes taxes for 2019, you'll have to pay interest on the amount you fail to pay by March 15. 2020.
  • If the S corporation does not pay all of the tax by that date, it may owe a penalty of 0.5% of the unpaid tax for each month the tax is not paid, up to a maximum of 25% of the unpaid tax.
  • If you do not file or extend the S corporation's return by March 15 (unless another date due to holidays or weekend), it may owe a penalty of 5% of the unpaid tax for each month the return is late, up to a maximum of 25% of the unpaid tax.
  • If the S corporation fails to file its 2019 return (including a Schedule K-1 to each shareholder) on time, it may also owe an additional penalty of $195 per shareholder per month for each month the return is late, up to a maximum of 12 months.
  • If you think you may need more time to prepare the S corporation's return, you should file for an extension using Form 7004. The due date for your calendar-year 2019 S corporation return will be extended until September 15, 2020.

Partnerships

Like an S corporation, a partnership does not owe tax itself, but is generally treated as an extension of the partners. Partnerships must provide a Schedule K-1 to all partners, detailing their share of the partnership's income and deductions for the year.

  • If you do not file your 2019 partnership return (including a Schedule K-1 for each partner) on time, you may owe a penalty equal to $195 per partner for each month the return is late, up to a maximum of 12 months.
  • The due date for a calendar-year partnership's 2019 return is March 15, 2020. If you think you may need more time to prepare your return, you should file for an extension using Form 7004. The due date for your partnership return will be extended until September 15, 2020.

Do you need to request a state extension?

State guidelines for filing extensions vary. In many cases, unless you owe state taxes, your federal automatic extension can be used to extend your state return(s) as well. Refer to the tax form instructions or tax help for your state(s) before you request a state extension.

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