The recent federal tax filing deadline was extended, and understanding what this means can help taxpayers avoid penalties and plan their filings better.
The IRS and Treasury Department have announced a federal tax filing and payment deadline extension for individual filers.
Individuals can now file and pay any balance due for their 2020 tax returns up until May 17 with no penalties or interest. However, the new deadline doesn’t necessarily mean business owners have extra time beyond April 15.
In addition, many states have also updated their filing deadline.
To help you determine when you need to file and pay your business taxes, here are some guidelines depending on your business structure.
- Sole proprietors filing a Form 1040 with a Schedule C: You’re able to take advantage of the extended deadline. Your taxes are due on May 17.
- Partnership: Were due on 3/15 unless you filed an extension.
- S corporations: Were due on 3/15 unless you filed an extension.
- C corporations: Your tax deadline remains the same, April 15.
The IRS also offers extensions for those businesses or individuals that need additional time to file.
With the federal tax filing deadline extended, it’s important to review your documents carefully and submit your return on time to avoid any penalties.
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Frequently Asked Questions
What does a federal tax filing deadline extension mean?
A federal tax filing deadline extension gives eligible taxpayers additional time to submit their tax returns and, in some cases, pay taxes without facing penalties or interest.
Does a personal tax deadline extension apply to all businesses?
No. The extension rules depend on the type of business entity. Sole proprietors filing Schedule C may qualify, while partnerships, S corporations, and C corporations generally follow different deadlines.
What is the tax deadline for sole proprietors?
Sole proprietors who file business income on a Form 1040 with Schedule C may generally follow the extended individual tax filing deadline if one is provided.
Do partnerships and S corporations get the same tax deadline extension?
No. Partnerships and S corporations typically have earlier filing deadlines and must file extensions separately if they need additional time.
Do C corporations receive the same tax filing extension?
C corporations have their own filing deadlines and are not automatically included in extensions provided for individual taxpayers.
How can businesses avoid tax filing penalties?
Businesses can avoid penalties by understanding their specific filing deadlines, keeping accurate records, preparing documents early, and filing extensions when additional time is needed.
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