Biz Tax Genie Here! Don’t Panic A Guide to Business Tax Extensions!

Hey there, business superstars! Biz Tax Genie here, your friendly tax advisor. Tax season can be stressful, but don’t worry – I’m here to help! Today’s topic: business tax extensions.

Need More Time? No Problem!

Many business owners, even those who didn’t make any money this year, still need to file a tax return. The good news? Filing an extension is easy and FREE! It buys you extra time to prepare a more accurate return and avoid penalties for late filing.

Missing the Deadline? Not Cool!

Penalties for late filing can add up quickly. That’s why it’s crucial to pay attention to deadlines and not rely solely on your tax professional. Here’s a quick breakdown:

Who Needs to File?

• Single-Member LLC (SMLLC): If it’s just you, you report your business activity on your personal 1040 (Schedule C, E, or F). Check with your state, though, as some have different rules (California, anyone?).
• SMLLC Owned by Another Company: The company owning the SMLLC reports the activity on its own tax return.

But You MUST File If:

• Multi-Member LLC (MMLLC): This requires a 1065 return by March 15th (or an extension). Members get a K-1 when the return is filed, so they can’t file their personal returns until they receive it. This is why many businesses extend both personal and business filings.
• MMLLC Owned by Various Entities: Even if there’s no profit, a 1065 return is still due by March 15th (or extension). The IRS needs to know who owns the business!
• Husband & Wife Owned LLC: This is an MMLLC requiring a 1065 return by March 15th (or extension).

Even Without Activity, File!

• No sales or expenses? Still file that 1065 by March 15th (or extension).

Other Business Structures:

• SMLLC Taxed as S-Corp: File an 1120S by March 15th (or extension).
• All S-Corporations: File an 1120S by March 15th (or extension).
• C-Corporations: File an 1120 by April 15th (or extension).

See the chart below for deadlines and extension info! (You can replace this with a link to the IRS website for deadlines)

Knowing is Key!

Once you know if your business needs a separate tax return, mark your calendar and breathe easy! For personal tax extension info, check out my article “What to Do if You Can’t Pay Your Taxes by April 15th.” Remember, penalties for late personal tax filings can be brutal too!

The Price of Procrastination

• MMLLC Late Filing Penalty: $220 per month (per member) up to 12 months. Ouch!
• S-Corp Late Filing Penalty: Same as MMLLC, multiplied by the number of shareholders. Double ouch!

C-Corp Late Filing Penalty: 5% monthly penalty on unpaid taxes, up to 25% max. Or, a minimum penalty of $485 if the return is over 60 days late.