A Quick Guide to Tax Extensions This legal expert shares the facts when it comes to filing for a tax extension.

By Cliff Ennico

Opinions expressed by Entrepreneur contributors are their own.

Let's face it. If you're just starting to think aboutyour taxes now, it's probably too late for you to learn whatyou need to know between now and April 17. So I've got one wordfor you--just one word: extension!

If you're a sole proprietor or single member LLC, you canget an automatic six-month extension of time to file your return(to October 16, 2006) by filing IRS Form 4868, "Applicationfor Automatic Extension of Time To File U.S. Income TaxReturn", by April 17. This form is available as a freedownload at www.irs.gov. You don't have to explain to the IRSwhy you need an extension; they just give it to you. An extensionof more than 6 months cannot be granted if you are in the UnitedStates.

If you have a partnership, a corporation (regular or subchapterS) or an LLC with more than one member, you should still file Form4868 for your personal tax return. But you will also need to fileIRS Form 7004, "Application for Automatic 6-Month Extension ofTime To File Certain Business Income Tax, Information, and OtherReturns", by April 17 in order to get an automatic six-monthextension to file your Form 1065 (for partnerships and multimemberLLCs), Form 1120 (for corporations) or Form 1120-S (for subchapterS corporations). These forms are also available as free downloadsat www.irs.gov.

Last but not least, you'll also need to file applicationsfor an extension of time to file your state income tax returnsThese forms vary from state to state, but they're usuallyavailable as free downloads from your state's tax authority. Goto www.natptax.com/state_information.html and click onyour state when the map of the United States pops up. You'llthen be linked to your state tax authority's website. Click on"Forms and Publications," or search on the site for"extension forms."

When it comes to tax extension, keep in mind one importantthing: When you file for an extension, you're only getting moretime to file your tax return paperwork. If you think you'll owethe federal or state government any taxes for last year, you cannotextend the time required to pay your taxes. You'll have to"guesstimate" the amount you owe and pay it along withyour Form 4868 or Form 7004. Otherwise, you'll incur interestand taxes on the overdue payment and make yourself more likely tobe audited down the road. If, of course, you think the IRS owes youmoney, you won't be able to get it until you actually file yourreturn.

Cliff Ennico is a syndicated columnist, author and host ofthe PBS television series MoneyHunt. His latest book isSmall Business Survival Guide (Adams Media).This column is no substitute for legal, tax or financial advice,which can be furnished only by a qualified professional licensed inyour state. Copyright 2005 Clifford R. Ennico. Distributed byCreatorsSyndicate Inc.

Cliff Ennico is a syndicated columnist and author of several books on small business, including Small Business Survival Guide and The eBay Business Answer Book. This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Buying / Investing in Business

Former Zillow Execs Target $1.3T Market

Co-ownership is creating big opportunities for entrepreneurs.

Side Hustle

She Quit Her Job at Trader Joe's After Starting a Side Hustle With $800 — Then She and Her Brother Grew the Business to $20 Million

Jaime Holm and Matt Hannula teamed up to build a business in an industry that "didn't exist" yet.

Business Ideas

70 Small Business Ideas to Start in 2025

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2025.

Business News

Microsoft Is Laying Off Over 6,000 Employees, About 3% of Its Workforce. Here's Why.

The company said the cuts will affect all divisions and locations, with a focus on managers.

Business News

Nissan Is Doubling Its Initial Layoff Announcement, Cutting 20,000 Jobs: 'A Wake-Up Call'

The automaker is dealing with slowing sales and a recent failed merger with Honda.

Growing a Business

This Local Bakery Has Lines Out the Door. Here Are the Secrets to Its Success.

Known for its viral flat croissants and innovative desserts, Alexander's Patisserie also excels in hands-on leadership and team culture.