Extension forms are used by individual tax filers and businesses to extend the time needed to file a tax return. There are twoextension forms for income tax returns, Form 7004 and Form 4868. Both forms serve the same purpose of extending the time to file, but they apply to completely different types of returns. There is no need for any justification to file IRS extension forms. The IRS automatically grants you the extra months to file as long as it is filed on or before the deadline of the return you are filing an extension for. It does not grant extra time to pay taxes. You still need to pay your taxes on time.
In this blog, we’ll take a look at both extension forms to understand the difference between Form 7004 and Form 4868, who can file the forms, type of returns they apply to, and how to file.
What is Form 7004 and Who Should File it?
IRS Form 7004 (Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns) is an extension form that businesses can file to automatically get up to 6 extra months to file certain returns.
This particular extension form is filed by corporations (both C-corps and S-corps), partnerships, trusts, estates, tax-exempt cooperatives, real estate investment trusts (REITs), regulated investment companies (RICs) and foreign corporations. Each of these eligible entities can file an extension for certain returns, including Form 1065 which is filed by partnerships; Form 1120-S by S-Corps, Form 1120 by C-Corps, Form 1041 by trust & estates.
For example, if two people run a business structured as an LLC taxed as a partnership, they are required to file Form 1065. However, they could not complete their financial records on time. To avoid filing late, they submit Form 7004 before the deadline to receive an extension that gives them 6 months to complete and submit their return.
What is Form 4868 and Who Should File it?
On the other end of the spectrum, we have IRS Form 4868 (Application for Automatic Extension of Time to File U.S. Individual Income Tax Return). This extension form is used by individual taxpayers to automatically get a 6-month extension to file individual income tax returns such as Form 1040, Form 1040-SR, Form 1040-NR, and other eligible returns.
Individual taxpayers (can be W-2 employees, gig workers, or freelancers), sole proprietors, or single-member LLCs can file Form 4868 to receive an extension to file. On top of these filers, U.S. citizens who have been living abroad can also file Form 4868. They get a 4-month extension after filing the extension form which is added to the automatic 2-month extension they already receive.
For example, if an individual has their own business and is listed as the sole proprietor, the income and expenses have to be reported on Schedule C as part of their Form 1040. If the person requires more time to calculate their business expenses, they need to file a Form 4868 on or before the filing deadline to get an automated 6-month filing extension.
Form 7004 vs Form 4868: A Side-by-Side Comparison
Now that we have a basic understanding of Form 7004 vs Form 4868, let’s take a look at the differences between the two extension forms so that you never have to guess which tax extension form should I file.
| Category | Form 7004 | Form 4868 |
|---|---|---|
| Purpose of the form | Used for extending the time to file certain business returns | Used for extending the time to file certain individual income tax returns |
| No. of months extended | 6 months | 6 months (4 months for those living abroad) |
| Who files the form? | C-corps, S-corps, partnerships, trusts, estates, tax-exempt cooperatives, REITs, RICs, & foreign corporations | Individuals, sole proprietors, & single-member LLC owners |
| Type of returns the extension form is for | 1120, 1120-S, 1065, 1041, and other eligible returns | 1040, 1040-SR, 1040-NR, and related individual returns |
| Is the tax payment deadline extended? | No | No |
How to Choose the Correct Extension Form
The correct extension form you need to use depends on the entity and form type you are filing for. If you do not file an extension form by the original deadline and you need extra time to file, your tax return may be considered late, and the IRS may fine you penalties and interest.
Here are three steps to confidently identify the correct extension form:
Step 1: Identify the return you are filing an extension for
If the return is a personal tax return (for example, Form 1040, Form 1040-SR, or Form 1040-NR), you need to use Form 4868. For business returns (for example, Form 1120, Form 1120-S, Form 1065, Form 1041), use Form 7004.
Step 2: Check the tax classification
Don’t forget to check the tax treatment or how the entity is classified for tax purposes. Sole proprietors or single member LLCs reported on Schedule C have to use Form 4868 since they are treated as personal tax. While partnerships, S-corps, C-corps, multi-member LLCs taxes as partnerships use Form 7004.
Step 3: Confirm the deadline
Extension forms must always be filed by the original due date of the return. Since not all returns have the same due date, you must confirm the deadline beforehand.
The deadline for Form 7004 usually depends on the type of entity and the return. For most calendar-year entities, this is typically March 15 (S-corps and partnerships), and April 15 (C-corps and trusts). Form 4868 deadline is the same as the original due date of the individual tax return, that is typically April 15 for calendar-year filers.
Don’t Make These Common Extension Form Filing Mistakes
- Assuming filing an extension gives you more time to pay taxes. Extension forms do not extend the time to pay taxes, they extend time to file returns. You’d still need to pay your taxes before the deadline.
- Missing the extension deadline even by an hour means the extension is invalid. Always file on or before the deadline.
- Submitting multiple extension forms for the same entity and tax year does not give more time to file, it causes confusion and leads to duplicate records.
- Filing Form 7004 for a sole proprietor. Sole proprietors report business income on Form 1040 (Schedule C). They are treated as individual taxpayers by the IRS even though they may be a business.
- Forgetting that state extension rules may be separate from federal extension rules. Some states require their own extension forms.
How to File Extension Forms 7004 and 4868 Online with EZExtension
The filing process for a business tax extension vs individual tax extension is fairly simple, especially if you are using an IRS-approved extension filing provider like EZExtension.
By using our IRS-authorized tax extension e-file provider like EZExtension, you can electronically file both Form 7004 and Form 4868 online. With our platform, you get:
- Simple guided 3 step filing process that can be completed in 3-minutes
- Tele-file + online filing option for both forms
- Integrated payment options
- Real-time status updates via email
- AI-assisted error detection
- Secure SOC 2-compliant data handling
- Competitive pricing, starting at $9.99
FAQs
1. What is the main difference between Form 7004 and Form 4868?
The main difference between Form 7004 and Form 4868 depends on the return being filed and the taxpayer. Form 7004 extends the time to file returns for certain eligible business and entities. While Form 4868 extends individual income tax returns.
2. Which form should a sole proprietor file?
A sole proprietor who reports their business income on Schedule C Form 1040 has to file Form 4868 to get a filing extension.
3. Which form should a single-member LLC file?
A single-member LLC can file either Form 4868 and Form 7004 depending on their tax treatment. If it’s treated as a disregarded entity, it generally has to file Form 4868. If it elected corporate tax treatment, it has to file Form 7004.
4. Which form should a multi-member LLC file?
Multi-member LLCs taxed as a partnership have to file Form 7004.
5. Can I file both Form 7004 and Form 4868?
Yes, both Form 7004 and Form 4868 can be filed For example, an S corporation owner may file Form 7004 for the business return and Form 4868 for the owner’s personal return.
6. Does a tax extension give more time to pay?
No, a tax extension only gives you more to file, not more time to pay taxes. You still need to pay tax on or before the deadline to avoid penalties and interest.
7. What happens if I file the wrong extension form?
If you file the wrong extension form, the intended return may not get an extension, which can lead to late-filing penalties if the return is filed after the deadline.
8. Can Form 7004 be e-filed?
Yes, you can e-file Form 7004 using an IRS-approved extension filing provider like EZExtension.
9. Can Form 4868 be filed online?
Yes, you can file Form 4868 online using an IRS-approved extension filing provider, such as EZExtension that offers a quick filing process with real-time status updates, error detection, and integrated payment option.
10. Do I need a separate state tax extension?
Some states require a separate extension form, while others accept the federal extension or provide an automatic extension. The requirements vary. Always check applicable state tax agency rules.
From individuals to businesses, e‑file the right income tax return extension, Form 4868 or Form 7004, quickly and correctly with EZExtension.