How long is a tax extension good for

how long is a tax extension good for

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Determine the number of business owners, which determines which business structure is available for your organization. An LLC with one owner is a single member LLC and is considered a sole proprietorship. The activity of a sole proprietorship is reported on the owner’s individual annual income tax return, Form 1040, on Schedule C. Conversely, according to the Internal Revenue Service, a multi-member LLC can be either a partnership or an association taxable as a corporation. The activity of a partnership is reported on IRS Form 1065, while corporations file Form 1120.

File IRS Form 8832, Entity Classification Election. Per IRS instructions an eligible entity uses this form to elect how it will be classified for federal tax purposes. To complete the form the business needs an employer identification number, the name of the entity, an address and the name and social security numbers of all business owners. The business owners simply check-the-box to indicate if the organization will be taxed as a partnership or

an association taxable as a corporation.

Determine the date the organization ends its annual business cycle. Typically, businesses follow a calendar year, ending the business cycle on December 31st. The tax return due date for sole proprietors and partnerships is the 15th day of the fourth month after the year end or April 15th. The tax return due date for corporations is the 15th day of the third month after the year end or March 15th. Extensions are due no later than the due date of the original return.

Prepare and submit the appropriate extension form. A LLC organized as a sole proprietor files Form 4868 for an extension request. A LLC organized as a partnership files Form 8868, while LLCs organized as a corporation files Form 7004. According to the “2009 U.S. Master Tax Guide” extensions are granted automatically for six months. The extension forms are submitted by mail to the appropriate Internal Revenue Service Center for your locality or are submitted electronically through the IRS efile system.

Source: ehow.com

Category: Taxes

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