Form 1065 Extension Eligibility
If your partnership is working on its annual tax return and you’re thinking: Am I eligible for an extension on Form 1065? The good news is yes—you are eligible to request an automatic extension from the IRS, which allows you additional time to file without accruing immediate late-filing penalties.
Steps to Applying for an Extension
To apply for an extension with 1065 (U.S. Return of Partnership Income), the applicant needs to submit IRS form 7004 titled “Application for Automatic Extension of Time to File Certain Business Income Tax, Information and Other Returns.”
Form 7004 allows an automatic 6-month extension to file Form 1065. For calendar year partnerships, this means the deadline shifts from March 15 to September 15.
Dates for Submitting 7004
In order to receive the extension, form 7004 must be submitted on or before the original due date of the form 1065. Most partnerships using a calendar year will submit this by March 15. Those who file under fiscal year are required to submit this by the 15th day of the third month after their fiscal year end.
Key Points to Remember
Extension to File, Not to Furnish K-1s: While the extension provides additional time for you to file Form 1065, it does not extend the deadline for furnishing Schedule K-1 to each partner. However, in most cases, partners get their K-1s after the returns are filed which aids compliance.
No Payment Required: As partnerships are generally pass-through entities which do not incur income tax at the entity level, no payment is owed with the extension. Still, since the partners need their K-1s for their returns, there is a risk of delayed filing impacting them.
E-File Option Available: Form 7004 may be submitted either electronically or via post. However, e-filing is preferred because it tends to be quicker in providing receipt and processing confirmation.
Summary
When submitting Form 7004, you will receive an extension for Form 1065. You can get the extension as long as you submit 7004 by the original due date, giving you a total of six months to complete your partnership return. Keep in mind this is an extension to file, not an invitation to prepare and distribute K-1s, which are typically needed by partners for their individual taxes. Taking action in a timely manner reduces the risk of complications with the business and keeps the partners compliant with the IRS.
For any compliance matter, Dimov Tax stands ready to present expertise. Contact us today for professional assistance in Form 1065 and Form 7004 matters.