How to File Form 7004 and Get a Tax Extension
5 steps to help you get a six month extension to file your taxes
Running your own online or Shopify ecommerce brand is truly exhausting. We get it. With so many things on your plate—from the stressful lead-up to Black Friday Cyber Monday (BFCM) and the holiday season, to trying to efficiently manage your inventory—it’s pretty easy for tax deadlines to slip your attention.
But all is not lost!
You could be eligible to file for a business tax extension.
To do this, you must complete Form 7004 to request an automatic extension of time to file certain business income tax, information, and other returns. This form provides you with an extension of six months to file your tax returns and is essential for businesses that need more time to gather all the necessary financial information.
Here are five steps to help you file your Form 7004 to get your extension:
Step 1: Determine Your Eligibility
Before you start filing your Form 7004, it's important to ensure that your ecommerce brand is eligible for an extension. Generally, the IRS grants automatic extensions for businesses that are unable to file their tax returns by the original deadline. However, it's important to check the eligibility criteria for your specific situation.
In order to qualify you need to:
- Complete Form 7004 properly
- Make a proper estimate of any taxes you owe
- File Form 7004 before or on the deadline of the form you need an extension on
If you are set up as a S corp or a partnership, the deadline is March 15.
If you are set up as a C corp or an individual, the deadline is April 15. (April 15 2023 is a Saturday so the 2023 extension is Tuesday, April 18)
- Make sure you pay any tax due: Form 7004 doesn’t extend the time to pay any tax due
Step 2: Gather the Required Information
Once you've confirmed your eligibility, the next step is to gather all the necessary information required to file Form 7004. This includes basic information about your business, such as your name, address, and tax identification number, as well as details about your tax liabilities, estimated tax payments, and any credits you plan to claim.
Read our blog Federal taxes: 9 crucial things EVERY business needs to know
Step 3: Fill Out Form 7004
Now it's time to fill out Form 7004. You can download the form from the IRS website here or if you already use Finaloop for your taxes, we can file it for you. Make sure to double-check all the information you enter to ensure accuracy and avoid any mistakes that could lead to delays or penalties.
Specify which form you’re filing for.
There are 36 to choose from, but here are the main four which should be relevant to you:
- Form 1065 - the tax return filed by partnerships
- Form 1120 - the tax return used by C corporations
- Form 1120-S - the tax return used by S corporations
- Form 1065 - the tax return used by limited liability corporations (LLC) filing as partnerships
- Specify whether you are a foreign corporation that doesn’t have an office or place of business in the US
- Specify whether you have any corporate subsidiaries
- Specify which tax year you’re filing for
- Specify whether for your accounting you use the fiscal or calendar year
- Specify your estimate of taxes owed
- Specify how much tax you’ve paid so far this year
- Specify if there are any taxes left to be paid
Step 4: File Form 7004
Once you've completed Form 7004, you can file it electronically or mail it to the IRS. E-filing is generally faster and more convenient, but you can also choose to send a paper form by mail if you prefer.
Step 5: Follow Up and Prepare for Tax Season
After filing Form 7004, make sure to follow up with the IRS to ensure that your extension has been granted. You should also use this additional time to prepare for tax season by gathering all the necessary financial information and ensuring that your books are current.
Filing a Form 7004 for ecommerce brands can be a complex process, but it's essential for businesses that need more time to gather all the necessary financial information. By following these steps and seeking the guidance of a tax professional, as well as using AI accounting and AI bookkeeping to help you, you can ensure that your tax filings are accurate and timely, minimizing the risk of penalties and maximizing your tax savings.
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The information provided on this website does not, and is not intended to, constitute legal advice. All information, content, and materials available on this site are for general informational purposes only. Readers are advised to consult with their attorney or accountant with any questions or concerns.
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