Businesses have many options when it comes to how they file their taxes, but one thing that has remained constant is the fact they need to file a tax extension before the deadline. There are different types of tax extensions that can help businesses keep more money in their pockets. Depending on the type of extension you qualify for, you may be able to delay paying taxes until later this year, next year, or even indefinitely. There are several types to file business tax extensions. In the below paragraphs some of them are discussed.

Let’s have a look at them.

Corporate Tax Extension: This is the most common type of business tax extension and allows businesses to postpone paying federal income taxes until after their fiscal year ends. To qualify, your company must have at least $5 million in taxable income and meet other requirements. You can apply for a corporate tax extension online through the IRS website.

Payroll Tax Extension: This type of extension allows businesses to delay paying payroll taxes (such as Social Security and Medicare taxes) until after their fiscal year ends. To qualify, your company must have at least $500,000 in taxable wages and meet other requirements. You can apply for a payroll tax extension online through the IRS website.

Estate Tax Extension: This type of extension allows businesses to postpone paying estate (or inheritance) taxes until after their fiscal year ends. To qualify, your company must have assets worth more than $5 million and meet other requirements. You can apply for an estate tax extension online through the IRS website.

Individual Tax Extension: This is the least common type of business tax extension and allows individuals to postpone paying federal income taxes until after their fiscal year ends. To qualify, your Adjusted Gross Income  (AGI) must be less than $150,000 and you must file a Tax Return. You can apply for an individual tax extension online through the IRS website.

Benefits of filing business tax extension:

There are many benefits to filing for a business tax extension. Here are some of the most common benefits of filing for an extension:

Avoid penalties and interest: 

Filing for an extension may avoid any penalties or interest that would otherwise be associated with late taxes.

Keep better records: 

Keeping good records of your business filings is essential in order to avoid any potential problems down the road. By filing for an extension, you’ll have more time to do this.

Organize finances: 

Filing for an extension can help you organize your finances better by giving you more time to save up money before taxes are due. This will also help ensure that you’re not scrambling to pay taxes when they’re due later in the year.