Form 7004 Instructions for Filing Business Tax Extensions

Key Takeaways

• Form 7004 allows businesses to request an automatic extension to file various federal tax returns.
• The form does not extend the time to pay any taxes due—only the time to file.
• Corporations, S corps, partnerships, and multi-member LLCs can all use Form 7004.
• Deadlines vary by business type, with corporations typically filing by April 15 and partnerships by March 15.
• Filing must occur on or before the original tax due date, either by mail or electronically.
• Recent updates changed how the form is structured and clarified that no confirmation is sent unless the request is rejected.

IRS Form 7004 instructions are used by various types of businesses to complete the form that extends the filing deadline on their taxes. There are three different parts to this tax form. The first two depend on the kind of tax that needs to have its due date extended, while the third is universal.

If you think you won't make the original due date on your tax return for business income, an extension can be added by sending Form 7004 by mail. It can also be sent online. However, this extension request must be submitted before the original due date expires. Once you do, the due date will be postponed automatically.

Who Can Use It and for What Purposes

The 7004 extension form is commonly used by various corporations, S corporations, limited liability companies with multiple partners, or other forms of partnerships to extend deadlines on their tax returns. It is important, however, to mention that this form will not extend payment time for taxes that are already due, only the date for filing the return. If the tax is already due, it must be paid regardless of the extension. Also, keep in mind that under-estimating your due taxes can trigger unwanted penalties for your company.

How to Complete Form 7004

The tax form has three different parts. The first one only needs to be filed by companies requesting a 5-month extension; the second needs to be filed when requesting a 6-month extension; and the third part needs to be filed by everyone.

• Add your name, address, and the company's Tax ID number.
• Use the specific code for the type of tax return you wish to postpone. Form 1065 is used for LLCs with multiple partners or other forms of partnership, corporations use form 1120, while S corporations need Form 1120S.
• You will need to specify where your company stands on Regulations 1.6081-5. If you are a corporation from another country, a US corporation that does external business, or a corporation that mainly does business with US goods, an extra three months for both filing and paying your taxes will automatically be given.
• If you are in a short tax year, the appropriate box must be checked.
• Calculate an estimate on the total amount of due tax for the entire year, then subtract all outstanding payments or credits that will be taken out of your account. The result is the balance due, which can be paid by credit or debit card.

Step-by-Step Breakdown of IRS Form 7004 Instructions

To ensure accurate completion of Form 7004, follow these detailed IRS filing instructions:

1. Complete Business Information:
   • Provide the full name, address, and Employer Identification Number (EIN) of the business.
2. Select the Return Code:
   • Choose the appropriate code based on the return being extended (e.g., 09 for Form 1065, 12 for Form 1120, 25 for Form 1120-S). A full list of codes is available in the form instructions.
3. Indicate the Tax Year:
   • If using a calendar year, enter “12/31” for the tax year end. Fiscal year filers should enter the appropriate month and day.
4. Check for Short Year Filing:
   • Indicate if your business is filing for a short tax year (e.g., due to formation or dissolution).
5. Claim Special Extensions (if eligible):
   • Corporations meeting conditions under Regulations section 1.6081-5 (e.g., foreign corporations) may qualify for an automatic 3-month extension.
6. Estimate Total Tax Liability:
   • Estimate your total tax liability for the year and subtract any payments made (estimated payments, credits, etc.) to determine the balance due.
7. Make a Payment (if applicable):
   • While the extension does not delay tax payments, you can remit payment electronically via the IRS Electronic Federal Tax Payment System (EFTPS) or by check.
8. File Form 7004:
   • Submit the form by the original tax due date via mail or e-file through an IRS-authorized provider.

Revised Instructions for Form 7004

In December 2017, the IRS updated its instructions regarding Form 7004. The following instructions were revised:

• The form's structure was changed, and it now consists of two distinct parts. The first part has all the needed forms for which it can be used as an automatic extension for filing outstanding taxes, while the second part contains questions for all types of business that might use this form.
• Certain addresses where Form 7004 needs to be sent were changed in the states of Illinois, Georgia, Kentucky, Michigan, Tennessee, and Wisconsin.
• An additional revision was added in January 2018, specifically mentioning that, given the form's automatic approval, the taxpayer will not be given any notification when the form goes through successfully. They will, however, notify the taxpayer if the request is denied.
• While the previous version of the form classified businesses according to the maximum extension time, under the new structure, all types of entities are listed in Part 1.

Electronic Filing vs. Paper Filing Options

Form 7004 can be submitted in two primary ways:

• Electronic Filing (E-file):
  • Preferred by the IRS and allows faster processing. Businesses can e-file using tax software or through an authorized e-file provider. E-filing is often required for certain entities that file more than 10 returns.
• Paper Filing:
  • While slower and less efficient, paper submissions are accepted. The correct IRS mailing address depends on the form being extended and the state where the business is located. Updated mailing addresses can be found on the IRS Form 7004 page.

Important note: The IRS does not send confirmation of acceptance for Form 7004 unless the request is denied.

Deadlines for Filing Form 7004

• Taxes for corporations need to be paid by the 15th day of the fourth month after the end of their fiscal year. If the year ends on December 31st, taxes must be filed and paid by April 15th.
• In the case of S corporations and partnerships, the tax returns are due by March 15th.
• Both corporations and S corporations get a 6-month extension on their due dates, pushing the deadline until October 15th.
• LLC with multiple partners and other forms of partnerships also have a 6-month extension, meaning they have until September 15th to file their tax returns.

Common Mistakes to Avoid When Filing Form 7004

Avoid these common errors that can cause delays or penalties:

• Missing the Deadline:
  Filing even one day late invalidates the extension. Always file by the original return due date.
• Not Paying the Tax Due:
  Form 7004 only extends the time to file, not to pay. Interest and penalties will accrue if tax is unpaid by the original deadline.
• Incorrect Form Codes:
  Using the wrong code for the tax return can result in a rejected extension request.
• Underestimating Tax Liability:
  Significantly underestimating taxes owed may lead to penalties and interest.
• Failing to File Electronically When Required:
  Large businesses or those filing multiple returns may be required to e-file and could face issues if they paper file.

Frequently Asked Questions

1. What is Form 7004 used for?Form 7004 is used to request an automatic extension to file various business tax returns, such as Forms 1065, 1120, and 1120S.

2. Does Form 7004 extend the time to pay taxes?No. It only extends the time to file the return. Taxes are still due by the original deadline.

3. Can I file Form 7004 online?Yes. It can be submitted electronically through IRS e-file systems or authorized tax software providers.

4. When is Form 7004 due?It must be filed by the original due date of the return—typically March 15 for partnerships and S corps, and April 15 for corporations.

5. What happens if my Form 7004 is rejected?You’ll be notified by the IRS only if the extension is denied. If accepted, no confirmation is sent.

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