How To Get An Extension To File Your Tax Return

Yes, the tax season is upon with the first filing date for

some businesses being March 15, 2005. If you can't imagine

getting your tax returns together by that date, you need not

worry. The IRS automatically gives you an extension if your

file the appropriate form. As you might expect, there are

different forms for different businesses.



An Important Note



It is vitally important that you understand that an

extension to file taxes is not an extension to PAY taxes.

The IRS will give you a break on the filing date, but it

wants the money now! If you anticipate that you will owe

taxes, you need to send in the appropriate payment. Failure

to do so could result in interest charges when you

eventually get around to filing your returns.



Corporations



If you conduct business as a corporation with a fiscal

year-end of December 31st, you are required to file your

2004 tax returns on or before March 15, 2005. You can get an

automatic extension, however, by filing form 7004 before the

March 15 deadline. Form 7004 applies both to "C" and "S"

corporations and grants you an automatic 6-month extension

to September 15, 2005.



While this automatic extension applies to "S" corporations,

you should be aware of a quirk in the tax code. Since "S"

corporations "pass through" taxes to your personal returns,

the six-month extension is really only a five-month

extension. To file your personal tax returns, you must

report information from the K-1 issued from the "S"

corporation. Unfortunately, the IRS only grants automatic

extensions for filing personal tax returns to August 15,

2005.



Limited Liability Company



The IRS has never really figured out to how to handle

limited liability companies. It has settled on a policy of

avoiding the issue and simply treating the entity as a

corporation or partnership.



Limited liability companies with more than one owner

typically elect to be treated as partnerships for tax

purposes. If this describes your situation, the LLC is

required to file tax returns by April 15, 2005. You can

obtain a 3-month extension by filing form 8736. Although

form 8736 contains language regarding partnerships, you will

still use this form since the IRS classifies you as a

partnership for tax purposes.



If you are the sole owner of an LLC, you may be in for a

surprise. The IRS doesn't recognize LLCs owned by one

person. Instead, it simply considers you a sole proprietor

and the rules for sole proprietorships apply. These are

discussed below.



Partnership



If your business is a partnership, you are required to file

tax returns by April 15, 2005. You can use form 8736 to

obtain a 3-month extension.



Self-Employed/Sole-Proprietor



If you are not using a business entity, your business tax

information should be reported on your personal tax return.

The due date for filing your personal tax returns is April

15, 2005. You can obtain a four-month extension by filing

form 4868.



Summary



Regardless of how your business is organized, the IRS will

automatically grant you an extension to file your tax

returns. By sending in the appropriate form, you can avoid a

mad rush that will inevitably result in missing deductions

and overpaying your taxes. Just make sure you pay any taxes

you anticipate owing by the appropriate date.



Richard Chapo is CEO of http://www.businesstaxrecovery.com -

Obtaining tax refunds for small businesses by finding

overlooked tax deductions and credits through a free tax

return review.