What is a tax filing extension?
A tax filing extension allows businesses and individuals to request more time to file their tax returns with the IRS and state tax agencies. While an extension grants additional filing time, it does not extend the deadline to pay any taxes owed.
For businesses using Homebase HR & Compliance, understanding tax extensions is crucial for avoiding penalties and ensuring compliance with filing requirements.
How does a tax filing extension work?
Businesses that need extra time to file their tax returns can submit an extension request to the IRS using Form 7004 (for business tax returns) or Form 4868 (for personal tax returns, including sole proprietors). If approved:
- Businesses typically receive an automatic 6-month extension.
- Any taxes owed must still be paid by the original deadline to avoid penalties and interest.
- State tax extensions have different rules and forms—check with your tax authority.
Key extension deadlines
- March 15 – Deadline for S corporations (Form 1120-S) and partnerships (Form 1065) to file for an extension.
- April 15 – Deadline for C corporations (Form 1120) and sole proprietors (Schedule C) to request an extension.
- October 15 – Final extended deadline for businesses that filed for an extension in April.
What happens if a business misses the filing deadline?
If a business fails to file on time and doesn’t request an extension, it may face:
- Late filing penalties – The IRS charges 5% per month on unpaid taxes, up to 25%
- Late payment penalties – If taxes are owed, a 0.5% penalty per month applies
- Interest charges – Accrued daily on unpaid balances
A tax filing extension can help businesses avoid late-filing penalties, but paying taxes owed by the original deadline is still essential. Homebase payroll can ensure your taxes are filed and paid correctly and on time.
How to apply for an extension
To request a tax extension:
- Complete the appropriate IRS form – Form 7004 (businesses) or Form 4868 (individuals and sole proprietors).
- Submit the form electronically or by mail before the original tax deadline.
- Estimate and pay any owed taxes by the filing deadline to avoid penalties.
- Confirm approval – Extensions are typically granted automatically unless there are errors in the request.
How Homebase HR & Compliance helps businesses stay compliant
Managing tax deadlines and compliance can be overwhelming, but Homebase HR & Compliance simplifies the process by:
- Keeping businesses informed about important tax deadlines
- Providing guidance on HR and compliance best practices
- Ensuring tax and payroll compliance to avoid penalties
Homebase HR & Compliance makes it easier by keeping businesses informed of key deadlines, providing expert guidance on HR and compliance best practices, and ensuring smooth tax and payroll compliance.
Homebase simplifies payroll and tax filings
Tax extensions help businesses avoid penalties, but staying on top of payroll tax deadlines is just as important. Homebase payroll makes tax filing easy by:
- Automatically calculating and filing payroll taxes on time
- Tracking essential tax deadlines for federal and state requirements
- Providing payroll reports to simplify tax preparation
Using Homebase, you can ensure your tax filings are handled correctly and on time, freeing you to focus on growing your business.