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How to File a Tax Extension for Your Business

Tax Day is April 18, 2022! It’s fast approaching and you’re realizing you’re not going to be able to file in time. So, what are your options? And will it still be possible to claim your R&D tax credit?

The R&D Tax Credit

Looking like you can’t make the April 18, 2022 tax deadline to file your tax return? The good news is you can prepare your R&D tax credit now (in under an hour) so it is ready to go when you file your taxes.

If you’re a business filing for an extension that doesn’t mean you’re out of luck when it comes to claiming your R&D Tax Credit. Any eligible business can file their R&D Credits along with the returns they file after the six-month extension. To find out if your business is eligible, answer a few questions at Neo.Tax — if you’re a startup and are filing your returns without filing for an R&D credit, you may be leaving as much as $250,000 on the table.

How to File an Extension

The IRS makes it relatively simple to file for a Federal Tax Return Extension. However, while requesting an extension is straightforward, there are some important things you need to remember:

  • An extension of time to file your return does not grant you any extension of time to pay your taxes;
  • Companies in a loss position typically won't owe (but this is not a certainty) and likely will only need to file the extension with name, address details and select the entity type box;
  • You should estimate and pay any owed taxes by your regular deadline to help avoid possible penalties;
  • You must file your extension request no later than the regular due date of your return (April 18, 2022 this year!);
  • Want to know more? See what the IRS says here!

Form 7004

Companies operating as a C-Corporation can request a six-month extension by filling out Form 7004, which can be mailed or e-filed via the IRS website.

One last note: Leave yourself a little time when filing your Form 7004, because the IRS will alert you if there were errors that caused your extension to be denied. You have a chance to refile Form 7004 with any corrections as long as it’s still before the deadline.

Your R&D tax credit must be filed with your tax return. If your extension is granted, you will have until October 17, 2022 to file your tax return and your R&D tax credit.

Tax season used to be the worst time of the year, but at Neo.Tax, we’re committed to making it simple, straightforward and valuable for startups. Let us help you file today (or six months down the road)!

Calculate Your R&D Tax Return