Yes, the tax season is upon with the first filing date for some businesses being March 15, 2005. If you can't imagine getting your tax returns together by that date, you need not worry. The IRS automatically gives you an extension if your file the appropriate form. As you might expect, there are different forms for different businesses.
An Important Note
It is vitally important that you understand that an extension to file taxes is not an extension to PAY taxes. The IRS will give you a break on the filing date, but it wants the money now! If you anticipate that you will owe taxes, you need to send in the appropriate payment. Failure to do so could result in interest charges when you eventually get around to filing your returns.
Corporations
If you conduct business as a corporation with a fiscal year-end of December 31st, you are required to file your 2004 tax returns on or before March 15, 2005. You can get an automatic extension, however, by filing form 7004 before the March 15 deadline. Form 7004 applies both to "C" and "S" corporations and grants you an automatic 6-month extension to September 15, 2005.
While this automatic extension applies to "S" corporations, you should be aware of a quirk in the tax code. Since "S" corporations "pass through" taxes to your personal returns, the six-month extension is really only a five-month extension. To file your personal tax returns, you must report information from the K-1 issued from the "S" corporation. Unfortunately, the IRS only grants automatic extensions for filing personal tax returns to August 15, 2005.
Limited Liability Company
The IRS has never really figured out to how to handle limited liability companies. It has settled on a policy of avoiding the issue and simply treating the entity as a corporation or partnership.
Limited liability companies with more than one owner typically elect to be treated as partnerships for tax purposes. If this describes your situation, the LLC is required to file tax returns by April 15, 2005. You can obtain a 3-month extension by filing form 8736. Although form 8736 contains language regarding partnerships, you will still use this form since the IRS classifies you as a partnership for tax purposes.
If you are the sole owner of an LLC, you may be in for a surprise. The IRS doesn't recognize LLCs owned by one person. Instead, it simply considers you a sole proprietor and the rules for sole proprietorships apply. These are discussed below.
Partnership
If your business is a partnership, you are required to file tax returns by April 15, 2005. You can use form 8736 to obtain a 3-month extension.
Self-Employed/Sole-Proprietor
If you are not using a business entity, your business tax information should be reported on your personal tax return. The due date for filing your personal tax returns is April 15, 2005. You can obtain a four-month extension by filing form 4868.
Summary
Regardless of how your business is organized, the IRS will automatically grant you an extension to file your tax returns. By sending in the appropriate form, you can avoid a mad rush that will inevitably result in missing deductions and overpaying your taxes. Just make sure you pay any taxes you anticipate owing by the appropriate date.
Richard Chapo is CEO of http://www.businesstaxrecovery.com
Obtaining tax refunds for small businesses by finding overlooked tax deductions and credits through a free tax return review.
residential cleaning services Deerfield ...Self-assessment relies on taxpayers voluntarily meeting their tax obligations. This... Read More
While accountants are reaching for aspirin, millions of Americans are... Read More
Import duties continue to be significant elements in the cost... Read More
If you have employees, you are responsible for paying a... Read More
April 15th looms in front of most people every year... Read More
One can never underestimate the enthusiasm that politicians have for... Read More
Are you in the middle of a disagreement with the... Read More
Knock-Knock-KnockWho's there?The IRS!The next quarterly payment of estimated income tax... Read More
With gas prices at an all time high before Hurricane... Read More
Someone once said, 'the best way to calculate your taxes... Read More
Many Americans believe that an IRS debt is a debt... Read More
As we enter mid-March, taxpayers begin to become very interested... Read More
All states also have their own tax system. Typically there... Read More
As your business grows, you are going to need help.... Read More
Choosing the right tax preparer for your business is a... Read More
One way to maximize your business profits is by reducing... Read More
1812The first attempt to impose an income tax on America... Read More
One of the most important, but least understood or appreciated... Read More
"Settle for Pennies on the Dollar! IRS debts settled for... Read More
The powers of Congress, and the limitations set upon those... Read More
Whether helping the kids with a down payment on their... Read More
Most people look forward to getting their tax return, but... Read More
QUESTION: I have been contacted by my local city... Read More
Six Urban Myths ? Taxation"I am proud to be paying... Read More
The U.S. Department of Agriculture estimates that it costs nearly... Read More
maid service near Morton Grove ...Most people look forward to getting their tax return, but... Read More
We all love to criticize the IRS, don't we? And... Read More
OverviewIn the Pre-Budget Report of December 2003 the Chancellor Gordon... Read More
Let's assume that you would like to begin saving for... Read More
To tax or not to tax - this question could... Read More
The federal tax code is complex. This complexity generally arises... Read More
Deduction of Refinance PointsAny points that you pay in the... Read More
In trying to comply with tax laws for your e-business,... Read More
The IRS has obtained civil injunctions against more than 100... Read More
Donating your used car to charity is a win-win situation;... Read More
Millions of people file tax return extensions every year. The... Read More
All tax authorities to e-commerce transactions should investigate the record... Read More
Beware of advertisements that claim to settle tax debts for... Read More
Tilting the Tax Laws in Your Favor.In order to accelerate... Read More
Employers often ask employees to designate the amount of tax... Read More
NOTE: This is the first in a series of 5... Read More
Six Urban Myths ? Taxation"I am proud to be paying... Read More
As a small business owner or self-employed person, one of... Read More
The 100 year old investment-banking firm of... Read More
In the largest criminal tax case ever filed, KMPG has... Read More
The electronic transaction ordinance defines the certificated copies in which... Read More
"What we've got here is a failure to communicate." ... Read More
Deducting Your Auto ExpensesAuto deductions are a very complex topic.... Read More
The end of tax filing extensions is quickly approaching. What... Read More
As a small business owner, it's wise to familiarize yourself... Read More
Tax |