How to File Business Tax Extensions for 2025: 4 Simple Steps

Tax season can be a stressful time of year, especially for small business owners with competing priorities and low bandwidth. You must dig through last year’s financials, complete extra paperwork, make tax payments, and remember due dates. 

Fortunately, a business tax extension can grant you some relief. 

If you file a tax extension, you’ll have extra time to file your returns. You’ll avoid the tax notices, penalties, and interest associated with late returns. 

You may want to file a business tax extension if you need more time to finish your return preparation activities, such as the following: 

• Finding extra deductions and tax credits

• Gathering final revenue and payroll figures

• Getting help with complicated calculations

To file a business tax extension, you’ll find the correct form, estimate the amount you should pay, and submit your payment with the extension.

Keep reading for a detailed explanation of how to file your business tax extension.

Understanding Business Tax Extensions

What Is a Tax Extension?

A tax extension is a request for more time to file your return.

If you file a business tax extension request before your tax return due date, you’ll get an extra six months to file. For example, if your tax return is due by April 15th, you would file an extension by that date. Your return’s extended due date would be October 15th. Your extension period might vary, depending on your facts.

Your tax extension allows additional time to file your return, not extra time to pay. Avoid interest or underpayment penalties by paying your entire tax liability before the original tax filing deadline. 

We recommend partnering with tax experts for help with tedious calculations. 1-800Accountant can help you determine what you should pay.

Types of Business Tax Extensions

• Federal Tax Extension: U.S. businesses file income tax returns with the Internal Revenue Service (IRS). A federal tax extension grants additional time to file your federal tax return.

• State Tax Extension: Most states impose income taxes on businesses. State rules vary, but many jurisdictions allow extensions.

• Local Tax Extension: Certain cities and counties, including New York City and many Ohio localities, impose business taxes.

Self-employed business owners should also consider filing extensions for their personal income tax returns.

What Is the Deadline for Filing a Business Tax Extension? 

Business tax extensions are only valid if filed before the due date of the return. Your filing deadline depends on your business entity type. Calendar-year taxpayers generally file by the following due dates. 

• March 15th, 2025: Partnerships, S corporations, and LLCs taxed as partnerships

• April 15th, 2025: Sole proprietorships, C corporations, and LLCs taxed as C corporations

Fiscal year filers (with a year-end other than December 31st) have different deadlines. If you think this applies to you, check with a tax professional.

What Happens If You Don’t File a Tax Extension and Miss the Deadline?

You could incur a late filing penalty for missing a tax deadline. The IRS imposes penalties and interest for failing to file returns and pay taxes timely.

The penalty amount depends on the type of delinquency:

• Penalty for failure to pay tax due: 0.5% of the tax liability per month until paid (up to 25% of the liability)

• Penalty for failure to timely file: 4.5-5% of the tax liability per month until paid (up to 25% of the liability)

Taxpayers with no tax due could risk losing a tax refund on unfiled returns.

If you have delinquent returns, we recommend partnering with tax professionals to help you catch up on your tax filings.

Natural Disaster Relief for Taxpayers

The IRS offers several types of support for taxpayers affected by natural disasters, such as wildfires or hurricanes. 

For example, individuals and businesses affected by the recent California wildfires have until October 15th, 2025, to file tax returns and pay any balance due. Impacted taxpayers do not need to file an extension.

If you can’t meet your return deadline because of a natural disaster, review the IRS provisions by state and year to determine whether you qualify for relief.

How to File a Federal Tax Extension

Step 1: Find the Correct Form and Check the Due Date

Your business structure determines the extension form you should use and when to file. The following table summarizes tax forms and due dates for each entity type.

Extension Deadlines and Forms by Entity Type

The limited liability company (LLC) extension form and due date depend on the entity’s tax structure. Single-member LLCs default to sole proprietorships, and multi-member LLCs default to partnerships for tax purposes. However, LLCs can file elections for corporate tax treatment. 

Refer to the following detailed guide for extension due dates by entity. Note that the extension deadline represents the original due date of the business tax return.

Sole Proprietorships and Single-Member LLCs

• Federal extension: IRS Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return

• Extension due date: April 15th, 2025

• Extended tax return due date: October 15th, 2025

Partnerships and Multi-Member LLCs

• Federal extension: IRS Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns

• Extension due date: March 15th, 2025

• Extended tax return due date: September 15th, 2025

S Corporations and LLCs Taxed as S Corps

• Federal extension: IRS Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Return

• Extension due date: March 15th, 2025

• Extended tax return due date: September 15th, 2025

C Corporations and LLCs Taxed as C Corps

• Federal extension: IRS Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Return

• Extension due date: April 15th, 2025

• Extended tax return due date: October 15th, 2025

Step 2: Estimate Your Federal Taxes

Your tax liability represents your estimated taxable income multiplied by the applicable income tax rate. To calculate your business’s taxable income, total your receipts and subtract your expenses.

If you’ve worked with tax professionals and made quarterly estimated payments throughout the year, you can simply update your calculations with full-year figures.

Alternatively, you can partner with professional CPAs for comprehensive tax advice and return preparation. 

Step 3: Gather Your Estimated Payment Records

Total the estimated tax payments you made to the IRS throughout the year. Don’t forget to include prior-year overpayments you applied to the current tax year. (If you’re unsure whether this applies to you, check last year’s federal tax return.) 

Subtract the total prior payments from the estimated tax liability you calculated in Step 2. The result is what you should pay with your business tax extension.

Step 4: Submit Your Federal Tax Extension 

The IRS allows multiple extension filing methods. Choose one of the following options:

• E-file using tax preparation software

• Mail a paper extension to the IRS

• Hire a tax professional to assist you with filing

If you file Form 4868 and plan to make a payment, you’ll receive an automatic extension by making an electronic payment through the IRS website. You shouldn’t submit a separate extension form. 

Taxpayers submitting electronic or paper extensions should enter business information on the form, such as the business identification number and estimated tax liability for the year. 

How to File State Tax Extensions

The state extension process is similar to the federal extension process. The following steps also apply to city and county extensions. 

Before digging in, review your state’s rules. Many states provide automatic extensions, so you might not need to file a separate form. Some jurisdictions require a form sent with any payment, so check if this applies to you.

Additionally, confirm whether your state imposes income tax on small businesses. Several states do not levy personal or business income taxes, so you may not need to file an extension.

Step 1: Find the Correct State Form and Check the Due Date 

Use your state’s website to find the correct extension form for your entity type. Review the instructions to determine the extension deadline.

Step 2: Estimate Your State Taxes

Refer to the estimated taxable income you calculated for your federal tax extension. Adjust the figure for state calculation differences such as depreciation or U.S. treasury interest.

Multiply the result by your state tax rate to estimate what you owe. 

If your business operates in multiple states, your calculations may include an extra step: Consider the percentage of your operations within each jurisdiction. State taxes can get complicated quickly, so we recommend consulting tax professionals for location-specific guidance. 

Step 3: Gather Your Estimated Payment Records

Have you been making quarterly tax payments? Review your payment records and total the state payments you’ve made. 

Subtract prior state payments from your estimated tax liability. The result is what you should pay with your state tax extension.

Step 4: Submit Your State Tax Extension

Review your state’s filing instructions. State rules vary, but you’ll have one or more of the following options: 

• E-file using tax software

• Submit an extension through the state’s online portal

• Mail a paper extension to the state

• Submit a payment only (no form required)

• Hire a tax professional to assist you with filing

How to Make a Payment with Your Business Tax Extension

If you’re using tax software, you can likely pay your federal and state taxes electronically. You’ll need to enter your bank account information before you submit your extension. 

Other payment methods include the following: 

• Sign up for the Electronic Federal Tax Payment System (EFTPS) to make federal payments.

• Mail a check to the address listed on the form instructions.

• Submit a payment online. You may need to create an account to access your state’s electronic payment system. 

• Pay over the phone. Certain jurisdictions allow taxpayers to call their automated payment line. 

Tips for a Successful Tax Extension Process

You’re now prepared for stress-free business tax extensions. Here are our final suggestions for a successful tax extension process: 

• Plan ahead. Gather your information early to avoid a last-minute frenzy.

• Stay organized. Document invoices and receipts throughout the year.

• Schedule time to prepare your tax returns and ensure a timely filing when they’re due.

• Seek professional assistance if you need help. 1-800Accountant offers a multitude of resources.

Work with Accounting Experts Who Specialize in Tax Extensions

Don’t let business tax deadlines interrupt your smoothly running business. The tax professionals at 1-800Accountant can relieve your tax season stress.

1-800Accountant offers budget-friendly pricing on tax preparation and return filing services. Tax professionals can help your business comply with tax laws and filing deadlines during tax season and year-round.

Schedule a free consultation for small business tax advisory services for specialized tax and accounting expertise.