The IRS Form 7004, “Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns,” is an essential form used by companies that require more time to file their tax returns. This type enables numerous organizations, such as corporations, partnerships, multi-member LLCs, and some estates and trusts, to delay their filing due date by six months without explanation.
The delay is on the filing, rather than payment, so companies will still be required to estimate and pay any tax due by the initial deadline or face penalties.
Who is required to File Form 7004?
Form 7004 is used for a broad variety of business types:
- C corporations: Independent legal entities that are taxed twice, with corporate earnings and shareholder dividends taxed individually.
- S corporations: Designated corporations that permit earnings, losses, deductions, and credits to be passed on to shareholders for tax purposes.
- Partnerships: Firms in which two or more people are owners and share earnings or losses.
- Multiple-member LLCs: Limited Liability Companies with two or more members, which have protection of liability.
- Certain estates and trusts: Legal structures set up to hold assets on behalf of the beneficiaries, and they can be required to file income tax returns.
Steps to File Form 7004
Check Whether You Need an Extension: Think about whether you require additional time to assemble documents or work through complicated tax problems.
- Gather information you need: This is a business name, address, and identifying number (EIN or SSN).
- Fill out Form 7004:
- Part 1: Provide the form code of the tax return you are filing an extension for (e.g., Form 1065 for partnerships).
- Part 2: Mark boxes pertaining to special cases.
- Line 5: Provide the tax year and whether it is a short year.
- Lines 6-8: Fill in the tentative total tax, total payments and credits, and amount due.
- File Form 7004: Filing electronically using the IRS’s Modernized e-File platform or by paper filing.
Due dates for filing
The due date for Form 7004 is identical with the original due date of the business income tax return. For instance:
- C corporations: Typically April 15 for calendar-year filers.
- Partnerships and S corporations: March 15 for calendar-year filers.
- Fiscal year Filers: The 15th day of the fourth month following the end of the corporation’s fiscal year and the third month for partnerships and S corporations.
Where to File Form 7004
Send Form 7004 to the IRS at specific addresses based on the type of tax return and the location of the business. For example:
- Kansas City, MO: For 1041 and 1120-H forms if the company is based in some states.
- Ogden, UT: For other companies in other states or outside6.
Penalties for late filing
Late submission of Form 7004 will result in penalties, such as a late filing penalty if the return is submitted after the extended due date without reasonable cause. Furthermore, a late payment penalty of 0.5% of the amount of unpaid tax for each month or part of a month, up to a maximum of 25% of the amount of unpaid tax, may be charged.
IRS Form 7004 is a great tool for businesses that need more time to file their tax returns. If companies understand the instructions and due dates, they can be in compliance and save themselves from unnecessary penalties. Keep in mind that while Form 7004 gives extra time to file, it does not give extra time to pay, so businesses must still pay any estimated taxes by the original deadline to avoid penalties.
Read more: What income is free from federal taxes?
Read more: How to claim an ACTC refund: requirements for Additional Child Tax credit
