How to Apply for a Tax Extension for an S Corporation

By Bryan Driscoll, J.D.

How to Apply for a Tax Extension for an S Corporation

By Bryan Driscoll, J.D.

Filing an extension for your S corp is a fairly painless process. Simply, you have to estimate the tax liability, complete a form, and submit it to the IRS. However, make sure that you file it on time to avoid any additional penalties. No one likes to file taxes and many people tend to dread this time of year.

Paperwork on a desk labeled "tax extension"

Regardless, filing a tax return for your S corp is inevitable. While an S corp rarely pays income tax, the IRS still requires that you file a return. If you think it might be a problem for you to file by the deadline, you can apply for an extension.

S Corp Tax Extensions

If you find yourself in a position where you won't be able to meet the deadline to file your S corp tax return, don't hide or procrastinate because the IRS will penalize you.

If you apply for an extension, you can avoid this costly mistake. Start the process now so you have enough time to complete the steps required.

Calculate Your Taxes

While you and any other shareholders are responsible for reporting taxes on the S corp income on your personal tax return, there are still items where the S corp might be liable for taxes. This could include passive income.

It's important to understand what taxes your S corp needs to pay because the IRS will require an estimate when you request an extension. A financial counselor should be able to help you determine what items your S corp might have to pay taxes on.

Complete IRS Form 7004

Once you've determined the taxes your S corp needs to pay, go to the IRS website to complete Form 7004. While the form itself is only one page, it would be prudent to review the IRS Instructions for Form 7004 before completing the form. Doing so will help to ensure you complete the form correctly.

Pay special attention to Part 1 of the form, which requires you to enter "25" as the form code. This corresponds to IRS Form 1120S, which is the tax return form for an S corp.

File IRS Form 7004

Once you've completed the form, it's time to file. Technically, you can file the form on the day your taxes are due, which is three months and fifteen days after the close of the tax year. But it's always best to file as soon as you've completed these steps to ensure enough time and to reduce your stress.

You have two options for filing Form 7004. You can either mail it to the IRS or you can e-file. E-filing is faster and more efficient, but some people prefer the mail. The option is completely up to you.

Whether you have been filing an S corp return for years or you're still at the stage of setting up your corporation, filing an S corp tax return can be daunting, especially if you know you won't be done by your deadline. That's why it's important for you to know that you always have the option of requesting an S corp tax return extension from the IRS.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.

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