Filing An LLC Tax Extension (2024 Updated Guide)

Atty. Danya Shakfeh
Published by Atty. Danya Shakfeh | Author
Last updated: March 8, 2024
FACT CHECKED by Lou Viveros, Growth & Transition Advisor
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Filing a Business Tax Extension gives the LLC more time to gather necessary documents, correct discrepancies, and ensure that the tax return is accurate.

To help you take the correct steps and avoid tax-related issues, my team of legal experts and I have created this guide to help you handle LLC tax extensions and prepare for what lies ahead.

Quick Summary

  • Filing an LLC tax extension is a mandatory step when you need more time to complete your tax return.
  • Filing Form 7004 by April 15th grants a tax extension, providing extra time to estimate and pay owed business income tax.
  • According to IRS statistics, more than 30% of small businesses annually use the six-month tax filing extension to enhance their tax management.
  • To avoid future complications, I always remind my clients that the extension is not for paying taxes owed but only for filing.


How To File an Extension for LLC?

Pile of clipboard documents inside a big folder

To file a business tax extension for your LLC determine the appropriate form for your tax recording and payment method.

From our experience running an LLC, we often request an extension to avoid penalties if we need more time to complete accurate returns.

"As tax filing season approaches, it's crucial for small business owners to be aware of their business tax deadlines and available options, including the possibility of requesting a business tax extension from the Internal Revenue Service (IRS)."

- Delina Yasmeh, J.D./Tax LL.M, Distinguished Expert in Mergers & Acquisitions

Here are some factors you should consider when filing an extension for an LLC:

LLC Tax Designations

When it comes to reporting business earnings on a federal tax return, the LLC structure is far more adaptable than other business forms.

If you're the only LLC member, you can file as a sole proprietor or choose to treat the firm as a C corporation or an S corporation instead of a sole proprietorship.

If you have multiple LLC members, the business can be treated as a partnership or as an association to reflect the income and deductions associated with each member's share of profits.

File For Extra Time

If your LLC does not qualify for an automatic extension, you can still request one by filing Form 7004 with the IRS. You can use this form to obtain up to six months of additional time to file your expenses.

Form 7004 is used by entities taxed as corporations and those treated as partnerships.

Single Member LLCs File As Individuals

If you are the only person who owns your LLC, make sure to check "Single Member LLC" when filing Form 7004.

You will be required to include income earned from other sources on Schedule E of your 1040 tax return [1]. According to the IRS, nearly 70% of single-member LLC owners report additional income on Schedule E.

Extensions Cannot Delay Paying Tax

Drawing from our firsthand experience, filing an extension does not delay paying taxes.

Extensions of small business taxes for LLCs are available by filing IRS Form 7004 at least 45 days before the end of the tax period.

For our LLC, we always file our tax return by April 15th to get the maximum six-month extension [2]. According to IRS statistics, over 30% of small businesses utilize this extension each year to manage their tax filing more effectively.

LLC Business Tax Extension

A business tax extension allows you to extend the time to file a business return.

Tax Extension for Single Member LLC treated as Sole Proprietorship

If you choose to file as a single-member LLC and your business tax return is due by the 15th day of the fourth month after fiscal year-end, then you can file for an automatic tax extension.

Unless the single-member LLC chooses to be taxed as a corporation, it is generally ignored for federal tax purposes, except in the following situations:

  • If a single-member LLC is the only member and all of their income and expenses from businesses are accounted for as a single-member LLC on Form 1040, it must be reported.

Tax Extension for Single Member LLC treated as Corporation or Partnership

If the single-member LLC is treated as a corporation, then there is no tax extension available.

If the single-member LLC files with the IRS as either a partnership or corporation, then you will receive an automatic tax extension. This tax extension will allow you to file your tax return any time between August 16 and October 15.

Tax Extension for Multi-Member LLCs Treated as a Partnership

Woman writing on a clipboard document

Multi-member LLCs that file for tax treatment as a partnership LLC can file an automatic extension of time through the IRS. This automatic six-month extension is until March 15th of the following tax year.

If you need more time, you may request up to another three-month tax extension by filing Form 7004 before October 15th.

Tax Extension for Multi-Member LLCs treated as a Corporation

If you have a multi-member LLC and choose to tax the business as a corporation, then you will automatically receive an automatic extension of time.

The tax extension will allow you to file your return any time between August 16 and October 15.

C-Corporation

If the MultiMember LLC is a corporation, it must file Form 1120, U.S. Corporation Income Tax Return, the C corporation income tax return [3].

S-Corporation

However, if a qualifying LLC entity is chosen to be taxed as an S Corporation, it must complete Form 1120S, the U.S. Income Tax Return for an S Corporation.

On Schedule K-1 (Form 1120S), each owner must report their proportionate share of corporate income, credits, deductions, gains, losses, and tax items.

The filing deadline for an S Corporation is March 15th of the following tax year [4].

FAQs

Why Should You File An Extension For An LLC?

You should file an extension for an LLC as a relief if you missed the tax filing deadline. Many small business owners are unaware of this option, leading them to wait until the last minute to file their business taxes.

Are LLC Tax Returns Extended?

An LLC tax return is automatically extended after the April 15th deadline. No separate extension filing is required, but you must make a business tax payment for any business income tax owed by that date.

How Long Are LLC Tax Extensions?

An LLC tax extension is six months beyond the original filing date. By filing Form 7004, business owners who have experienced an IRS audit will receive an extension until October 15th.

References:

  1. https://www.irs.gov/businesses/small-businesses-self-employed/single-member-limited-liability-companies
  2. https://www.irs.gov/forms-pubs/about-form-7004
  3. https://www.investopedia.com/terms/c/c-corporation.asp
  4. https://www.investopedia.com/terms/s/subchapters.asp

About The Author

Author
Atty. Danya Shakfeh, with over ten years of experience as a corporate attorney, leads Motiva Law, offering strategic legal advice to entrepreneurs. She is skilled at transforming complex legal concepts into clear strategies, allowing clients to pursue their goals. A "Rising Star" by Super Lawyers and an alumna of Northwestern University Pritzker School of Law, Danya is distinguished in business law.
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Growth & Transition Advisor
LJ Viveros has 40 years of experience in founding and scaling businesses, including a significant sale to Logitech. He has led Market Solutions LLC since 1999, focusing on strategic transitions for global brands. A graduate of Saint Mary’s College in Communications, LJ is also a distinguished Matsushita Executive alumnus.
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