Yes, the tax season is upon with the first filing date for
some businesses being March 15, 2005. If you can not imagine
taking your tax returns together by that date, you positive need not
worry. The IRS automatically gives you an extension if your
document the appropriate form. As you might expect, there are
different forms for different businesses.

An Important Note

It is vitally important that you understand that an
extension to document taxes is not an extension to PAY taxes.
The IRS will give you a break on the filing date, but it
desire the money now! If you anticipate that you will owe
taxes, you need to send in the appropriate payment. Failure
to do so could result in interest charges when you
eventually get around to filing your returns.

Corporations

If you conduct business as a corporation with a fiscal
year-finish of December 31st, you are required to file your
2004 tax returns on or before March 15, 2005. You can get an
automatic extension, however, by filing form 7004 before the
March 15 deadline. Form 7004 applies both to C and S
corporations and grants you an automatic 6-month extension
to September 15, 2005.

While this automatic extension applies to S corporations,
you should be aware of a quirk in the tax code. Since S
corporations pass through taxes to your personal returns,
the six-month extension is really only a five-month
extension. To document your personal tax returns, you must
report understanding from the K-1 issued from the S
corporation. Unfortunately, the IRS only grants automatic
extensions for filing personal tax returns to August 15,
2005.

Limited Liability Company

The IRS has never really figured out to how to handle
limited liability businesses . It has settled on a policy of
avoiding the issue and simply treating the entity as a
corporation or partnership.

Limited liability companies with more than one owner
typically elect to be treated as partnerships for tax
purposes. If this describes your situation, the LLC is
required to document taxation returns by April 15, 2005. You can
obtain a 3-month extension by filing form 8736. Although
form 8736 contains language regarding partnerships, you will
still make use of this form since the IRS classifies you as a
partnership for taxation purposes.

If you are the sole owner of an LLC, you may be in for a
surprise. The IRS doesnt recognize LLCs owned by one
human . Instead, it simply considers you a sole proprietor
and the rules for sole proprietorships apply. These are
discussed below.

Partnership

If your doing business is a partnership, you are required to file
tax returns by April 15, 2005. You can use form 8736 to
obtain a 3-month extension.

Self-Employed/Sole-Proprietor

If you are not using a business entity, your business taxation
experience should be reported on your personal tax return.
The due date for filing your personal tax returns is April
15, 2005. You may obtain a four-month extension by filing
form 4868.

Summary

Regardless of how your doing business is organized, the IRS will
automatically grant you an extension to document your tax
returns. By sending in the appropriate form, you might avoid a
mad rush that will inevitably result in missing deductions
and overpaying your taxes. Just build sure you pay any taxes
you anticipate owing by the appropriate date.