What is a US Business Tax Extension?

by Lo’Ai Shatara – Rise CPA Senior Manager, US Tax

The IRS provides a 6-month extension of time to file certain business income tax, information, and other returns. Note: this is an extension to file the tax return, NOT an extension to pay. The tax due should still be made by the original due date of the tax return.   

How can you get an extension? 

The IRS will grant an extension if you complete Form 7004 correctly, make a proper estimate of the tax, if applicable, file Form 7004 with the IRS by the due date, and pay any tax due.  

When is the due date to file an extension? 

Generally, Form 7004 must be filed on or before the due date of the applicable return. For corporations, the due date is the 15th day of the 4th month after the year end. Therefore, if the year-end is December 31, then the due date to file an extension and pay any tax due is April 15th. For partnership, the due date is the 15th day of the 3rd month after the year-end (March 15th if the year-end is December 31st). Note, there is an exception for the due date. If a corporation has a year end on June 30th, the due date is the 15th day of the 3rd month (September 15th).   

Will the IRS provide any letters or notification for extension approvals? 

The IRS will no longer provide or send any notification that your extension has been approved. However, the IRS will only notify you if your extension request is disallowed. If the extension is filed properly, the IRS will provide an automatic extension from the due date of your return to file the tax return.   

How to File an extension? 

At Rise CPA, we can file your extension (Form 7004) electronically with the IRS. It is important to note that if you file Form 7004 on paper and file your tax return electronically, your return may be processed before the extension is granted. This may result in a penalty notice.   

Your Business. New Heights. 

Rise CPA provides professional accounting, tax and business advice to help you make the right decisions at the right time. Since 1979, we’ve been helping clients create businesses and lifestyles they envision by delivering expert insights and financial guidance. At Rise, we excel at advising business owners and their families in a caring and personal way. Our services cover a wide range of Tax Planning, Auditing, Accounting, Estate Planning, and Business Advisory. Please call (604) 936-4377 or use the online contact form to book an appointment with one of our accounting professionals.