July 12, 2024


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Make sure your small business tax extension application is accepted

The IRS accepts many tax extension applications. But there are several reasons why they do not get tax extension applications. I will explain the reasons for rejecting a tax extension and how to make sure your application passes all these tests.

This information is for small business and personal tax returns extension applications for their business and their tax return, using Form 4868.

Corporate and partnership extensions (on Form 7004 ) are automatic. But you still have to submit the application before the deadline and pay the taxes paid.

File on time

Knowing when to apply for an extension is difficult. Generally, your extension application is due when your return is due. But knowing when to file a tax return – especially a business tax return – can be difficult.

Each year changes the exact expiration date for returns because the expiration date falls on the calendar. If a tax return is on a weekend or holiday, the deadline is the next business day. Here is a list of expiration dates for the current tax year.

There is no extension on payments! To avoid fines and penalties, including the price for your taxes and your renewal application.

Go to the bugs and report changed information.

If you report your business taxes on Schedule C, or if you report income from a partnership or LLC, you will file your business taxes as part of your tax return.

You will need to use Form 4868. The process of submitting the extension application is relatively easy, but there are a few possible pitfalls to look out for.

  • Your name and address and your tax identification information. Make sure you use the correct Tax ID number. The tax ID number on your extension is your social security number, not the number for your business, as this application is for your tax return.
  • An estimate of your tax liability. Your assessment must include (a) personal income, (b) business income, and (c) your self-assessment tax, if applicable. Here’s a quick tax estimate you might want to use. It’s not exactly, but it does not have to be. Failure to estimate the tax due correctly could result in the interruption of fines.
  • How much you have already paid (in withholding tax, estimated tax, or other payments),
  • The balance owed, and of course
  • How much do you pay? You send your payment with your extension application, or you can pay another way. But do not forget any payment made after the deadline is subject to fines and penalties.

You do not have to download form 4868 if you pay your balance electronically. The IRS will automatically process your renewal application when you pay part or all of your taxes electronically or telephone. Read more about tax payment options.

Pretty simple. But make sure you follow instructions.

Please review your application before submitting it.

Make sure you use the correct extension application form for your business type.

Check your application to make sure you have not made any mistakes.

Has your business or personal information changed?

For example, if you changed your address since your previous communication with the IRS, your tax information may not match the extension program information. If you have changed business or personal information, you must notify the IRS specifically, using Form 8822.

Make sure you have the correct shape.

Before loading form 4868, make sure it is for the correct year. The revision year is in the upper right-hand corner of the first page. The year of revision must correspond to the year of return. For example, if you are applying for your 2017 tax return, the review date should be on form 4868 for 2017.

Use Tax Software or a Tax Professional

The best way to ensure that your extension application is accepted is to use tax preparation software or a tax preparer.

You can use your extension application online using the software or arrange for your tax preparer to file. The software will walk you through the process, tell you if you are missing something, and make sure you are using the correct form.

Do I have to submit an extension application if I do not owe anything?

If you do not owe tax or get a refund, you will not be fined for failure to file or underpayment. So, technically, you do not need to file an extension application. But you can still apply. To be sure.

What if my tax extension application is rejected?

If your extension is rejected, you can reapply, but you might have fines and penalties if you did not apply by the tax return date. Lie down so early. If your application for an extension is rejected, you will be able to file again before the tax deadline.

Finally, do not forget the deadline for completing and filing the extended tax return. The time you have to complete it depends on your type of business.