All major and small corporations, as designed are subject to tax payable to IRS under Subchapter C or S of the Internal Revenue Code. Accordingly they have a legal obligation to file annual tax returns with the Internal Revenue Service as mentioned. As per IRS, this filing obligation is for all corporations whether big or small under subchapter C or S and not just limited to only the corporation earning taxable income but also equally applicable for the corporations that incur losses in an annual tax year must report a tax return by the deadline as prescribed in IRS instructions. There are certain privileges as provided by IRS for the corporations requiring an extension of time to file the necessary income tax returns beyond the deadline date and for which IRS form 7004 serves an immediate purpose to extend the due dates by considerable six months.
However the corporations whether C or S seeking the automatic extension of time for filing their returns must file IRS form 7004 by the due date say March 15th of the close of annual tax year. This will help the corporations filing a form 1120 or 1120S to enjoy the holidays through automatic extension of time of six months as provided by IRS form 7004.Corporations should take up this privilege only for extending the filing of their tax returns beyond the due dates and not paying the owed taxes as applicable to IRS must be understood. If the actual tax due is not paid as per the prescribed due date as designed for corporations whether C or S then the taxes as owed to IRS in part or full will carry legitimate penalty with interest as accrued as the case may be in each case. If the tax return is filed late and the corporation has an outstanding tax bill, the IRS will increase the amount owed by 0.5 percent each month until the return is filed or five months pass, whichever is later. However, a late-filing penalty is still charged, even if the corporation doesn’t owe any tax. In the case of a C corporation, for example, this will cost the business $100 once the return is more than 60 days late.
E-filing of Form 7004 through trusted tax partner of IRS ensures the required automatic extension of time and this is however should be done along with whatever tax-owable to IRS as payable. The time given for filing tax returns is not applicable to paying corporate taxes with the extended period of six months as a virtue of IRS form 7004.This is strictly not allowed by IRS. For this very reason, the corporations who are responsible for filing the corporate tax return should make a considerable tax payment with the form 7004 to ensure that the corporations are not charged a late-payment penalty, failing to comply will accrue at the monthly rate of .5 percent until the tax is paid or the maximum penalty of 25 percent is reached. However, with form 7004 if the tax amount is tentatively calculated as 90 percent or more of the income tax reported on the return that corporations eventually file, and the outstanding balance gets paid by the extended filing deadline, the corporations will not be liable for late-payment penalty.
In order to get the 6-month extension, Form 7004 must be filed with the IRS by the original tax return deadline for your company. Corporation income tax returns are always due by the 15th day of the third month after the tax year closes. For corporations that maintain their books and records using the calendar year, the deadline is always March 15. When fiscal years are used — the last day of the corporation’s tax year ends on a day other than December 31 — the deadline is different.
Whether corporations use Form 7004 on paper or e-file, the information it requires and the time it takes to complete is minimal. All that’s required is the corporation’s name, the address of its principal office, its employer identification number, the amount of estimated tax payments made during the year, a tentative tax liability, the applicable tax year and the appropriate code that corresponds to the specific tax form that will eventually be filed.
IRS always recommend e-filing of form 7004 for quick and easy acknowledgement for your automatic extension of time through authorized and trusted tax partner http://www.Etax7004.com