How to File an Income Tax Extension for Your Startup

Tax day is right around the corner! If you haven’t yet filed income tax returns for your startup corporation, you might be interested in learning how to file for an extension today.

Fortunately, filing for a tax extension is a fast process.

A few important things to note about tax extensions

• Filing for an extension only gives you more time to file your tax returns. If you owe tax, it doesn’t change the payment due date. If your company is unprofitable (i.e., has a net loss in the year), it generally doesn’t owe income tax, so this is usually a nonissue for startups.
• This article is about filing for a federal tax extension. You may also want or need to file an extension for whatever state or states you do business in. That process is not covered here.
• This article assumes you’re a C corporation with a calendar tax year.
• If your C corporation is incorporated in Delaware, regardless of where you do business, you separately need to pay a tax called Delaware Franchise Tax. That tax and related filing are completely different than your federal income tax filings, and it’s due on a different schedule.

As always, a quick reminder and disclaimer: We’re three-time startup founders and startup finance enthusiasts, not lawyers, financial advisors, CPAs, or tax preparers. This article is not legal advice, financial advice, or tax advice and isn’t meant as a substitute for consulting your own qualified advisors.

Filing for a federal tax return extension

The application for an automatic extension is Form 7004. You can find its instructions here. If you’re a C Corporation, you’ll want to apply for an extension for Form 1120 (Code 12).

California tax return extension

California automatically allows an extension for all corporations that aren’t suspended. If no payment is due, then no paperwork is needed.

Tax preparers are valuable! 

We find that most startups are happiest when they have a tax preparer to take care of their tax returns. If you’re interested in having Pilot take care of your company’s taxes, please check out Pilot Tax.