Form 7004 Gives an Extension on Business Taxes
March 15 2017
If you need an extension to file your business tax return, we have good news: the IRS has posted a revised version of the form you need, Form 7004. This update reflects the new option to make the extension an automatic 6-month stress relief.
Updates to Form 7004
Although a blessing for many, this isn’t a new idea. Previously, Internal Revenue Code section 6081(b) provided a 5-month auto extension for C corporations, while the new 6-month auto extension is filed under 6081(a). You’ll need this form whether you have a partnership, multiple member LLC, a corporation, or an s-corporation. The ‘automatic’ part just means you don’t need to get it approved by the IRS – automatic extra time is on your side.
Keep in mind that you still have to pay your taxes on time, regardless of when you file. So if you’re filing later thanks to the auto extension, you’ll have to estimate what’s due in order to pay by the deadline. Underestimating can mean penalties and fines, so approach this carefully and consult your tax professional if needed.
Added Complications
To complicate matters, tax return due dates change every year. If the due date is on a weekend or holiday, your payments are actually due the following business day. Corporate tax returns are due on the 15th of the fourth month after the end of the company’s fiscal year on Form 1120, s-corporation returns are due on March 15th on 1120-S, and the same date goes for partnerships on Form 1065.
Now back to Form 7004. Instructions for this form have been released here, but we’ll let you in on a brief on filling it out. Thankfully, it’s a short form as far as filing taxes go. You’ll only need to include your name, address, and business tax ID number, as well as the code that coincides with your business type.
You will also have to state if your business qualifies under regulations in regards to foreign corporations, where you transact business and keep books outside of the U.S. You will then have to claim if this was a short tax year for you and why. Perhaps most importantly, you will show the tentative total tax and the balance due. Once complete, file Form 7004 in person, online, or with your tax preparer.
Benefiting from Form 7004
Ready to get some extra time to file? Don’t forget to crunch the numbers and consult your tax professional to estimate your payments.
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