Tax season can be stressful. It can be even more stressful if you realize you are quickly approaching a tax deadline you can’t meet.
Many business owners find themselves unprepared to meet tax deadlines. It’s not uncommon to underestimate the time you need to properly complete your tax forms or to prepare your tax return only to realize that something seems off and you need more time to audit the return and look for errors.
But thankfully, if you need more time for your taxes, you can get it.
You can file an extension to give yourself more time — and avoid costly fines and fees.
If you are approaching a tax deadline you don’t think you can make, here is what you need to know about filing an extension.
When Are Federal Taxes Due?
Federal tax returns and tax payments are due in March or April, depending on your filing type.
- Individual / Sole Proprietor: Form 1040 is usually due on April 15, but the actual due date in any given year could be different based on when April 15th falls and if there are any Federal or Washington DC holidays on that day. Due to holidays, the deadline in 2022 is April 18 for most taxpayers. Sole proprietors need to also submit Schedule C on their personal tax returns.
- Partnership: Form 1065 is due on March 15.
- S-Corporation: Form 1120-S is due on March 15.
- C-Corporation: Form 1120 is due on April 15. Due to holidays, the deadline in 2022 is April 18 for most states
Note that businesses that file tax returns for a fiscal year (not for a calendar year), have different deadlines.
Related: Add These Important Tax Deadlines to Your Calendar
What’s the Deadline for Filing a Federal Tax Extension?
If you want to file an extension for your taxes, it must be done before or on the day that taxes are due.
- Individual / Sole Proprietor: Extension is due on April 15. Due to holidays, the deadline in 2022 is April 18 for most states.
- Partnership: Extension is due on March 15.
- S-Corporation: Extension is due on March 15.
- C-Corporation: Extension is due on April 15. Due to holidays, the deadline in 2022 is April 18 for most states.
If you are planning to file a tax extension, don’t wait until the last minute to file for your extension. If you know an extension is coming, file right away.
What Is the Deadline After a Tax Extension?
Filing a tax extension gives you a new deadline. Once your extension is filed, your return is due six months later.
- Individual / Sole Proprietor: After an extension, taxes are due on October 17.
- Partnership: After an extension, taxes are due on September 15.
- S-Corporation: After an extension, taxes are due on September 15.
- C-Corporation: After an extension, taxes are due on October 17.
Related: These 6 Small Business Tax Deductions Are Overlooked Too Often
How Do I File an Extension?
Filing a tax extension is relatively easy and should take less than 30 minutes to complete. You can file online using the following forms.
- Individual / Sole Proprietor: Form 4868
- Partnership: Form 7004
- S-Corporation: Form 7004
- C-Corporation: Form 7004
Does Filing a Tax Extension Give Me an Extension on Paying Taxes?
No. A tax extension gives you extra time to file your return, but it does not give you extra time to pay your taxes. Taxes owed are due on the original filing due date.
You must pay your estimated taxes before the original filing date or risk paying penalties. Even if you file an extension, pay your estimated taxes to avoid fees and interest.
What About State Tax Deadlines and Extensions?
All of the information and dates provided in this article have related to federal taxes. There are also systems for filing extensions for state taxes. Please refer to your state to find the tax extension rules related to your location.
What If I File Taxes Late?
If you file taxes late, you face fines and fees. Fines increase with the length of time you file past the deadline. For every month you don’t file, you may be fined 5% of the unpaid tax for each month that the return is late. The maximum failure-to-file penalty is 25%.
What If I Pay Taxes Late?
If you pay taxes late, you also face fines and fees. Fines increase with the length of time you fail to pay. For every month you don’t pay, you may be fined 5% percent of unpaid tax every month until you pay. The maximum failure-to-pay penalty is 25%.
Paying your taxes on time is essential for avoiding fines and fees. This is one of the reasons why financial forecasting is important for your business. When you have a clear picture of your finances, you will have a better idea of what you own and be able to pay your estimated taxes and avoid fees.
If you need help creating a financial forecast for your business, download our free Small Business Financial Planning Guide.
What If I File and Pay Late?
If you file and pay late, you face both penalties. But the penalties don’t stack. If you are late to both, you will only pay 5% interest per month.
What If I’m Late on Filing Other Tax Forms?
In addition to being required to file income taxes, business owners may be responsible for submitting other tax fees and forms throughout the year. There are fines for failing to file and pay these taxes.
For example, if you’re late filing a W2 or a 1099, the fine is a maximum of $50 per form filed late. If you’re late filing a 1065 form (for partnerships) or a 1120S form (for S-Corps), the fine is a maximum of $195 a month per partner.
It’s important to work with a tax professional who can tell you what tax forms and fees your business is required to submit, and work with them to file on time.
Related: The 10 Tax Mistakes You Don’t Want Your Small Business to Make
Get Your Taxes Filed On Time
Tax deadlines don’t need to be stressful. Extensions give you an opportunity to get more time to get your taxes in order. And, professional tax partners can help you get everything prepared in time.
If you need help filing your business taxes, talk to CFO2U about how we can help you get everything filed in time.
Contact us today to create a tax plan for your 2022 filing. Schedule your intro call, get your flat fee quote, and start preparing your return right away. Schedule your discovery call.
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