6 Key Things to Know About Filing a Tax Extension for Disregarded Entities

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Tax deadlines have a way of sneaking up on you—especially when you’re running a business. But here’s the good news: The IRS has got your back if you need more time to file. They offer extensions, and which form you use depends on your business’s federal tax classification.

For Single-Member LLCs treated as disregarded entities, Form 4868 is your ticket to extra time. It’s like hitting the pause button on your tax return and avoiding last-minute panic. But here’s the catch: while you get more time to file, it doesn’t mean more time to pay. If you owe taxes, you still need to settle up by the original deadline—otherwise, penalties and interest could come knocking. 

In this blog, we will explain everything you need to know about filing a tax extension and show you how ExpressExtension, an IRS-authorized e-file service provider, makes the process quick, simple, and stress-free.

1. Understand Your Tax Classification 

By default, the IRS treats a single-member LLC as a disregarded entity, meaning all business income and expenses flow through to your personal tax return. If your single-member LLC is taxed as a disregarded entity, you should file Form 1040 with Schedule C, E, or F, depending on your business activities : 

• Schedule C – For businesses operating as sole proprietorships. 
• Schedule E – For rental real estate, royalties, or partnership income. 
• Schedule F – For farming or agricultural activities.

Note: If your single-member LLC is taxed as a C Corporation or S Corporation, you must file Form 1120 or Form 1120-S, respectively

2. Request for an Extension: Form 4868

Suppose your single-member LLC is taxed as a sole proprietorship (disregarded entity). In that case, you can request additional time to file your tax return by submitting Form 4868 – Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. By requesting this extension, you gain an extra time of 6 months to ensure accuracy in your return while avoiding the stress of last-minute filing. However, staying on top of your payment obligations is crucial to prevent unnecessary penalties.

If your single-member LLC is taxed as a corporation, you must use Form 7004.

3. Information Required to File Form 4868

When filing Form 4868 for your single-member LLC, you must provide the following details:

• Full Name (as listed on your tax return)
• Residential Address
• Social Security Number (SSN)
• Estimated Total Tax Liability for the year
• Balance Tax Due (amount you still owe)

All this information ensures a smooth extension request process and helps you avoid delays.

4. Tax Extension Deadline

The deadline to file Form 4868 for your single-member LLC depends on the deadline for your tax return (Form 1040), which is typically April 15th of each year.

For the 2024 tax year, the deadline to request an extension is April 15, 2025. Filing an extension on time ensures you get an additional six months to submit your return, moving the deadline to October 15, 2025.

5. Penalties for Late Filing or Payment of Taxes

Failing to file Form 4868 on time can lead to penalties. It’s important to understand the potential consequences of missing deadlines:

• Late Filing Penalty: If you do not file your Form 4868 by the due date, the IRS imposes a 5% penalty on the unpaid tax per month or part of a month, up to a maximum of 25%.
  
• Late Payment Penalty: If you fail to pay your tax liability by the deadline, a 0.5% penalty applies per month on the unpaid tax, with a maximum penalty of 25%. However, the IRS may waive this penalty if you have a valid, reasonable cause for the delay.

To avoid unnecessary penalties, file Form 4868 on time and estimate your tax liability accurately so that you can make timely payments.

6. Tax Extension Considerations for Overseas Single-Member LLC Owners

If you reside outside the United States, you may qualify for special tax extension provisions. Here’s what you need to know:

• The IRS grants an automatic extension until June 15 if you live abroad. No additional form is required for this extension.
• If you need more time beyond June 15, you can file Form 4868 to extend your deadline to October 15.
• Even with an extended filing deadline, any taxes owed must still be paid by April 15 to avoid penalties.

Navigate Your Tax Extension Filing Easily with ExpressExtension!

With over a decade of expertise in tax extension filing, ExpressExtension provides a seamless e-filing experience. Its powerful features make the filing process quicker, easier, and stress-free.

• Real-Time IRS Updates: You can get instant updates on your extension’s real-time filing status via email or dashboard, ensuring you’re always in the loop.
• File Anytime, Anywhere:  E-file your tax extension from any device anytime, anywhere, and get your extension approval instantly.
• Copy Return Data:  Save time by copying filing data from the previous year’s filing returns. Just review your form and submit it to the IRS in minutes.
• State Tax Extensions Made Simple: Easily complete your state tax extension filing process —just choose the extension form, fill in the details, print, and mail it to the appropriate state agency.
• Express Guarantee: You will receive a full refund of your filing fee if the IRS rejects Form 4868 or Form 7004 because it is a duplicate filing.
• Dedicated Support: Get assistance via phone, email, or live chat throughout the filing process.

Get started today with ExpressExtension to file your tax extension easily!