How to Apply for a Tax Extension for an S Corporation

By Jeff Franco J.D./M.A./M.B.A.

Despite the fact that an S corporation doesn’t pay income tax on most types of earnings, the IRS and many state tax agencies still require S corporations to file annual income tax returns. However, if you are responsible for preparing an S corporation’s tax return, but don’t think you’ll be able to file it by the due date, you can always apply for an extension to file.

Despite the fact that an S corporation doesn’t pay income tax on most types of earnings, the IRS and many state tax agencies still require S corporations to file annual income tax returns. However, if you are responsible for preparing an S corporation’s tax return, but don’t think you’ll be able to file it by the due date, you can always apply for an extension to file.

Step 1

Calculate the amount of tax that the S corporation owes. An S corporation only pays tax on certain built-in gains and passive income, while shareholders are responsible for paying the tax on all other corporate income.

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Step 2

Obtain a copy of Form 7004 from the IRS website. Form 7004 is the application that an S corporation must file to receive an automatic 6-month extension to file its tax return.

Step 3

Fill out Form 7004 through Part II. Enter the S corporation’s name, address and employer identification number, or EIN, at the top of the form. Skip Part I and enter “25” as the form code in Part II, which corresponds to Form 1120S – the tax return form for S corporations. Answer the remaining two questions in Part II.

Step 4

Fill out Part III of Form 7004. Unless the S corporation maintains its books and records outside the United States and Puerto Rico, earns most of its income from U.S. possessions, or is a foreign corporation with a place of business in the United States, skip the first question of Part III. For the remaining questions, enter the tax year and the estimate of tax, if any, that the S corporation owes.

Step 5

File Form 7004 with the IRS. To obtain the automatic extension, the IRS must receive the 7004 by the original due date of the tax return – which is always 3 months and 15 days after the close of the tax year. You can either e-file the tax extension or mail it to the IRS.

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How to File an Extension for an S Corp

References

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