If you own a business, you would understand that it takes a lot of time, resources and effort to get all your financial records in place. A proper book keeping is very important for your business, especially at the time of filing your taxes with the IRS (Internal Revenue Services). You need to keep track of all your revenues, profits, losses and expenditure. This needs to be filed during the time of taxes. This is also called Federal Taxes. But during this season, if you realize that you need more time to gather this information, you can get the same by filing a Tax extension with the IRS.
What is a business tax extension?
The business tax extension means that you can file for all your business taxes at a later date by filing for an extension with the IRS before the tax day. You can get more time to gather all your finance related information and then file for the same. This way, you can collect all the required information and not make any mistakes in the actual tax filing.
How much extension will you get?
Once you file for an extension, you are automatically eligible for that extended time to file your taxes. Depending on the type of business that you run you are eligible for an extension of five or six months.
How to file for a tax extension?
All you need to do is the fill in form 7004 with the IRS. This is an automatic tax extension form. Once you fill in your details and send it, you will be eligible for a business tax extension. Remember, this form is only for tax extension of finances related to your business. All personal tax related items cannot be filled in this form.
You need to provide your name, employment details, business details, business location and your SSN (Social security number) at the time of filling the form 7004. You do not have to mention the reasons for a tax extension.
There are two ways to file for a business tax extension. You can manually fill and submit the tax extension form 7004 with the IRS or you can do the same online. The advantage of filing your tax extension online is that, you can also pay your taxes online.
Things to remember
• Tax extension does not mean that you can delay paying your taxes to the government. Tax extension only means that you can file your taxes at a later date.
• You need to file your business tax extension before the tax day, failing to do so makes you eligible for a huge penalty for late tax filings.
• You need to make sure that all the details that you fill in the form are correct. If there is any mismatch in the details that you provide to the IRS, the IRS can reject your plea.
• You also need to make sure that you do not owe any amount to the IRS from your previous tax years. If you owe a huge amount of money to the IRS, then the IRS can reject your tax extension plea for the current fiscal year.