Continued from page 1
Limited liability companies with more than one owner typically elect to be treated as partnerships for tax purposes. If this describes your situation, LLC is required to file tax returns by April 15, 2005. You can obtain a 3-month extension by filing form 8736. Although form 8736 contains language regarding partnerships, you will still use this form since IRS classifies you as a partnership for tax purposes.
If you are sole owner of an LLC, you may be in for a surprise. The IRS doesn’t recognize LLCs owned by one person. Instead, it simply considers you a sole proprietor and rules for sole proprietorships apply. These are discussed below.
Partnership
If your business is a partnership, you are required to file tax returns by April 15, 2005. You can use form 8736 to obtain a 3-month extension.
Self-Employed/Sole-Proprietor
If you are not using a business entity, your business tax information should be reported on your personal tax return. The due date for filing your personal tax returns is April 15, 2005. You can obtain a four-month extension by filing form 4868.
Summary
Regardless of how your business is organized, IRS will automatically grant you an extension to file your tax returns. By sending in appropriate form, you can avoid a mad rush that will inevitably result in missing deductions and overpaying your taxes. Just make sure you pay any taxes you anticipate owing by appropriate date.
Richard Chapo is CEO of http://www.businesstaxrecovery.com - Obtaining tax refunds for small businesses by finding overlooked tax deductions and credits through a free tax return review.