What you need to know about filing tax extensions

Do you want to file a tax extension for your business taxes? Here’s a guide that ensures you get it right.

Most business owners mistake an extension for filing with an extension for paying. However, you’re required to pay your taxes by the tax return due date, even if you file an extension application. Failure to do so can result in penalties.

So, what is a tax extension?

Generally, with a tax extension, you have six extra months to do your taxes. To file an extension, you need to fill out the IRS Form 4868 and mail it or file it electronically. You can also get an extension without the form by paying all or part of your business income.

It’s wise to hire a San Diego CPA to help you with your tax extension as they have the experience and knowledge required for filing tax extensions. Besides, with a CPA pro, you don’t have to worry about making costly mistakes or forgetting to pay your business taxes on time.

If you owe on taxes, you must file your extension, whether you can make a payment or not to avoid hefty penalties. This is because the penalty for filing and not paying your taxes is less severe than not filing.

The two types of tax returns you should consider extending include:

1. Business tax return

This is for a corporation or partnership, and they must be filed separately. Although a partnership return is an information return, meaning no tax is due, applying for an extension is vital if you cannot get the return filed by the date due.

2. Personal tax return

This includes your business income, and for a sole-proprietor, you should include income on Schedule C while an LLC owner includes income from Schedule K-1.

The deadline for filing your tax extension is the same as Tax Day. So for this year, your tax extension deadline was July 15th.

Need help filing your tax extension?

Owning a business can make your tax filing difficult and complicated, making the entire process overwhelming. At Abbo Tax, we can take the worry off your back by helping you with your business taxes.