You formed an LLC last summer, signed clients in the fall, and paid a designer and a bookkeeper as independent contractors along the way. By March, the books are only partly reconciled, and the receipts are still in a shoebox, with the April deadline close. A tax filing extension can give you until October to finish, provided you know which return the business files and which obligations an extension leaves in place.
Business structure and return type
Census Bureau data show more than 5.6 million applications to start a business in 2025, a record for the series, and every new owner in that count has to sort out the same filing question at tax time. A sole proprietor reports business income on Schedule C, attached to the owner’s Form 1040. A single-member LLC is treated the same way unless it elected corporate status. For a 2025 return, both were due April 15, 2026, and Form 4868 moved the date to October 15.
Multi-member LLCs taxed as partnerships file Form 1065, and S corporations file Form 1120-S. Both were due March 16, 2026, because March 15 fell on a Sunday, and Form 7004 extended both to September 15. A C corporation files Form 1120, due April 15 for a calendar-year company, and Form 7004 moves it 6 months to October 15.
Deadlines outside a tax filing extension
Form 1099-NEC for payments made during 2025 was due to the IRS and to each contractor by February 2, 2026, since January 31 fell on a Saturday. Most information returns qualify for an automatic 30-day extension on Form 8809, but Form 1099-NEC does not. The IRS allows a single 30-day extension for it, requested on paper with an explanation, and the copy owed to the contractor stays due on the original date regardless. A business that hired employees faces the same late-January date for Form W-2, with the same limit of a single 30-day extension granted only with an explanation.
Form 7004 and Form 4868 extend the time to file a return, and any income tax owed is still due on the original date. A C corporation that owed tax for 2025 had to pay it by April 15, 2026, even with its return extended to October.
Estimated payments in the launch year
A taxpayer who had no tax liability for the prior year owes no penalty for underpaying estimated tax in the current year, provided the prior year covered a full 12 months, and the taxpayer was a U.S. citizen or resident throughout it. The IRS treats a prior year as having no tax liability when total tax on Form 1040 was $0 or when no return was required at all.
Someone who left a salaried job to start a business does not qualify, because the prior year’s Form 1040 showed tax. That owner is subject to the standard tests for quarterly payments from the launch year onward. The exception helps mostly recent graduates and anyone whose income in the year before launch stayed below the filing threshold.
April 15 is also the due date for the Q1 estimated payment, and Form 4868 does not move it. The other 2026 estimated payment deadlines are June 15 and September 15, 2026, and January 15, 2027. An owner who extends the 2025 return in April still has to send the 2026 Q1 payment that same day.
Business and personal extension requests
Learn how tax filing extensions work before the business’s 2025 returns come due, because an owner of a partnership or S corporation may need 2 requests in 2 months. Form 7004 for the business is due by mid-March. Form 4868 for the owner’s personal return is due by April 15, since the personal return cannot be finished until the business issues the owner’s Schedule K-1.
A partnership that uses its full extension can deliver K-1s as late as September 15, which gives each owner about 1 month to complete a personal return before the October 15 deadline. Owners who expect that timing can file their personal extension in April with an estimated payment based on the business’s year-to-date profit.
Startup costs on the initial return
Under Section 195 of the tax code, a new business can deduct up to $5,000 of startup costs incurred before it opened, such as market research or advertising for the launch. That $5,000 shrinks dollar for dollar once total startup costs pass $50,000 and disappears at $55,000. Whatever cannot be deducted immediately is spread over 180 months, starting with the month the business begins operating.
A Congressional Research Service report on the start-up deduction gives the arithmetic for a business with $41,000 of costs that opens in July. The owner deducts $5,000 at once and the other $36,000 at $200 a month, which adds $1,200 for July through December of the year it opens. The same report applies the phase-out to a larger figure. With $54,500 of costs, the immediate deduction falls to $500, and the remaining $54,000 is deducted at $300 a month.
S corporation elections
A new corporation or LLC that wants S corporation treatment has to file Form 2553 no later than 2 months and 15 days after the start of the tax year the election should cover. For a calendar-year company that already existed in the prior year, that works out to March 15, and the election can also be filed at any point during the prior year. Extending the business return does not extend that election deadline.
Under Revenue Procedure 2013-30, the IRS accepts a late election filed within 3 years and 75 days of the intended effective date, provided late filing is the only defect, the business acted diligently once it found the mistake, and every shareholder reported income as if the election had been in place. A late Form 2553 can be attached to the corporation’s initial Form 1120-S if that return is filed within the same window.
Penalties for partnerships
A partnership return filed late without a tax filing extension incurs a penalty of $255 per partner for each month, up to 12 months. A 4-partner LLC that files its 2025 return 2 months late owes $2,040 before any tax question arises, since a partnership usually pays no income tax itself. Form 7004 in March costs nothing and removes that charge through September 15. S corporations face the same $255 monthly charge for each shareholder, which matters for a new corporation that elected S status with several owners.
The LLC from last summer
If the LLC formed last summer has 1 member, its income goes on Schedule C, and Form 4868 by April 15 covers the owner’s return once the 1099-NEC forms for the designer and the bookkeeper are out by early February. If a partner joined in the fall, the LLC files Form 1065 instead. Form 7004 then has to be filed by mid-March, and the receipts in that shoebox have to be sorted into a finished partnership return by September 15.
