Filing a Tax Extension for a Limited Liability Company (LLC)

Trying to juggle submitting a tax return for your personal taxes and your business taxes can be difficult. While some people try to gather all the tax information for their personal and business taxes in the short window before April 15th, smart business owners opt for a tax extension.

The process for filing a tax extension for a limited liability company depends on the classification of your LLC. In this post, we'll cover all the ins and outs of filing a tax extension for your LLC, regardless of whether you own a single-member or multi-member LLC.

Business Classifications

In order to file a tax extension for a business, it's important to know which type of business you are filing an extension for. There are four main types of business classifications:

• Single-Member LLC: A single-member LLC only exists to separate the business from its owner for legal and liability purposes. All activities are reported on Schedule C of the owner's tax return.
• Partnership/Multi-Member LLC: All members handle their business-related taxes on their own personal returns. Members file all business-related tax information on Form 1065 and receive a Schedule K-1 tax form to report individual profits.
• S-Corporation: A structure that allows businesses to pass corporate taxes through to their shareholders. Tax information for the business is filed on Form 1120-S, and owners receive a Schedule K-1 tax form to report individual profits.
• C-Corporation: The business is taxed as a separate entity from the individual. Therefore, income for the business is taxed at the business level, while the salary an individual pays themselves from the business is taxed on their personal taxes.

Each classification has benefits and disadvantages when it comes to paying taxes. However, for our purposes, the different classifications also impact when and how to file a tax extension.

Tax Extension Due Dates

If you are planning on requesting an extension for your business, you'll need to know your business classification in order to know the due date for filing your extension. LLC extensions are due by the date that taxes are due for your LLC. The due dates for these classifications are as follows:

• Partnership/Multi-Member LLC and S-Corporation: March 15th
• Sole Proprietorship, Single-Member LLC, and C-Corporation: April 15th

Note that if the due date falls on a federal holiday or weekend, the date is pushed to the next business day.

How Long is a Business Tax Extension For?

Similar to a personal tax extension, a business tax extension extends the due date to file the tax return for your business by six months, regardless of which type of business you own. Therefore, the new filing deadlines for the business classifications are as follows:

• Partnership/Multi-Member LLC and S-Corporation: September 15th
• Sole Proprietorship, Single-Member LLC, and C-Corporation: October 15th

Similar to the original tax deadlines, if the extension deadline falls on a weekend or holiday, the due date gets pushed to the next business day.

How to File a Tax Extension for a Sole Proprietorship or Single-Member LLC

If you own a sole proprietorship or single-member LLC, you pay taxes for your business as part of your personal tax return. Therefore, you request an extension to file your taxes for your LLC as part of filing an extension for your personal taxes.

The steps for filing a tax extension for a sole proprietorship or single-member LLC include:

• Collect Personal Information: You'll need your social security number or tax ID, address, and your filing status (i.e., single, joint, etc.)
• Estimate Your Tax Liability: Project if you'll owe any taxes. This should include projected personal taxes and taxes from your sole proprietorship.
• Pay Estimated Taxes: Estimated taxes are due by the filing deadline of April 15th, even if you're approved for an extension to file your tax return.
• File Your Extension: File for a tax extension online. This is the fastest and most secure way to file your tax extension.

How to File a Tax Extension for Multi-Member LLCs

While the filing requirements for partnerships or corporations may vary, a partnership, s-corporation, and c-corporation all require Form 7004 to request a tax extension.

The steps for filing a tax extension for multi-member LLCs include:

• Collect Business Information: You'll need the name, location, and identifying number for your business.
• Identify Your Business Filing Requirements: You'll need to know the tax form that your business is required to file and enter the corresponding tax form code. For example, s-corporations file Form 1120-S, which is form code 25.
• Estimate Taxes Owed: You'll need to calculate the total tax your LLC owes and subtract it from any payments your business made to get the balance your business owes in taxes.
• Pay Estimated Taxes: Your business must pay estimated taxes by the original filing deadline.
• File Form 7004 Online: File your extension online with IRS Extension. This ensures that your extension request will be delivered to the IRS quickly and securely.

What are the Benefits of Filing a Tax Extension for an LLC?

While getting an extension may not mean extra time to pay your taxes, there are still several benefits to filing a tax extension for your LLC. Some of the biggest benefits include:

• Separate Filing Personal Taxes and Taxes for Your Business: Trying to accurately file your personal taxes can be difficult enough. Add all the forms associated with filing a tax return for your business, and it might just drive you crazy! Getting a tax extension for your LLC allows you to focus on your business taxes outside of the busy filing season and avoid potential errors by trying to file your personal taxes and business taxes all at once.
• Avoid Penalties: There is a penalty for failing to file a tax return for your LLC on time. Therefore, by filing an extension, you avoid potentially costly penalties that you would've gotten had you not filed for an extension.
• Extra Time: The most important benefit filing an extension for your LLC gives you is time. Having additional time to comb through your expenses and look for extra credits or deductions could end up saving you and your business thousands in taxes.

File a Tax Extension for a Limited Liability Company (LLC)

Heard enough? Get started filing a tax extension for your LLC today! IRSExtension.online's extension filing software makes it easy to file your extension online and helps you get approved by the IRS as quickly as possible. That way, you can get back to what matters most: running your business.