Spring is a busy time of year for businesses, the season is changing, a new quarter is beginning, and…business income taxes are due.
There are several business income taxes that are due on April 15, 2021. Some of the most common include the Forms 1120 and 1041.
Is your organization required to file either of these forms? If so, you may need some additional time to gather the information needed to complete your tax return. By filing an extension, you are able to extend your deadline as much as six months.
This business income tax return must be filed by corporations and all business entities that elect to be taxed as a corporation by the IRS. This form is designed to provide the IRS with information about the income, gains, losses, and deductions of corporations and a variety of other financial activities that have taken place during the tax year.
The IRS determines that this form must be filed by the 15th day of the fourth month after the close of the corporation’s tax year. For corporations operating on a calendar year, this deadline falls on April 15, 2021.
What is Form 1041?
Form 1041 is required to be filed by the fiduciaries and joint fiduciaries of estates and trusts. This form captures information about the income, gains, losses, and deductions applied to estates and trusts throughout the tax year.
The IRS determines the deadline for filing this form the same way as it does for the Form 1120. The deadline for filing is fifteen days and four months after the close of the tax year for the organization.
Filing a Form 7004
There are many misconceptions about tax extensions that just aren’t true, for example that they are difficult and the IRS frowns upon them. This is totally untrue! The IRS has no problem with you filing an extension for your business income tax return, as long as you follow the proper procedures for filing.
The IRS doesn’t even require a reason or explanation for your extension, it is automatically granted as long as your information is accurate and matches what is on file with the IRS.
If you choose to file an extension, it is crucial that you file it on or before the original due date of the form you wish to extend. It is also extremely important to note that the extension does not apply to your tax payment if you have a balance due to the IRS.
7004 Filing Options
The IRS accepts both paper copies of the Form 7004 and electronically filed copies. Electronic filing is actually the preferred method of the IRS. Not only does it allow the IRS to process your forms faster, but is more accurate and efficient for you as the filer.
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