Yes, the tax season is upon with the first filing date for
some businesses being March 15, 2005. If you cant imagine
getting your tax returns together by that date, you need not
worry. The IRS automatically gives you an extension if your
file 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 absolutely 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-end of December 31st, you are required to document your
2004 taxation returns on or before March 15, 2005. You might 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 acquired skill 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 businesses with more than one owner
typically elect to be treated as partnerships for taxation
purposes. If this describes your situation, the LLC is
required to document taxation returns by April 15, 2005. You might
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 tax purposes.

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

Partnership

If your business is a partnership, you are required to document
taxation returns by April 15, 2005. You might make use of form 8736 to
obtain a 3-month extension.

Self-Employed/Sole-Proprietor

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

Summary

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