March 15 is the IRS deadline to file extension requests for your S-corporations that file tax returns on Form 1120S and partnerships that file tax returns on Form 1065. Let’s clarify a few points.
- DBAs are not business entities, and no business extension is needed on March 15.
- LLCs are not corporations, most of the time. They could be corporations, but only if you specifically elected for them to be treated as such. In other words, at some point you had to request an S-corporation status from the IRS. If you’re not sure – then probably you did not.
- LLCs that have multiple owners – other than husband-and-wife LLCs – are usually partnerships. You do need an extension then.
- Single-person or husband-and-wife LLCs usually do NOT file separate tax returns and do not need extensions on March 15.
- If you filed Form 1065 or Form 1120S in the past – then you do have a partnership or an S-corporation, respectively. You do need an extension then.
- Another way to check is by the EIN letter from the IRS. If you requested a business Tax ID from the IRS, called an Employer Identification Number (EIN) – check the letter that came from the IRS. If it mentions that you are expected to file Form 1065 – you have a partnership. If it mentions Form 1120S – you have an S-corporation. Extensions are needed in these two cases. If, however, the EIN letter is addressed to your company name, followed by your own name and letters “SOLE MBR” – then your LLC is NOT supposed to file separate returns, and no extension needed.
- In case you do have a partnership or an S-corporation, filing an extension is critical. The penalties for missing this deadline are brutal: $200 per person per month!
The paperwork is as simple as it gets. Download Form 7004 from the IRS website, enter your corporation’s or partnership’s name, tax ID, and address, and a code on line 1b. For partnerships, the code is 09, for S-corporation it’s 25. Finally, enter “2021” on line 5a, zeroes on lines 6, 7, and 8 – and this is it! No signature needed.
The form must be mailed to the address listed in these IRS instructions. IMPORTANT: mail it certified mail! The IRS sometimes misplaces these forms, and the risk of penalties is significant.
The IRS does not let you file these forms via their website. Don’t ask me why. The IRS offers a list of approved 3rd party providers that do allow you to e-File, but there’s a cost. The cheapest ($10) option for the corporate extension that I have seen is EZextensions.
Disclaimer: I have never used this company, so I cannot endorse them in any way – neither their service nor safety. Maybe you can find a cheaper or even free provider. Let us know if you find one, please.