If you are a sole proprietor, you must file Schedule C (or Schedule C-EZ if you qualify), Profit or Loss From Business, with your Form 1040, U.S. Individual Income Tax Return, on an annual basis, to report your business income and deductions. Sole proprietors are also required to file Schedule SE, Self-Employment Tax, with their Form 1040 as well. There may be other forms and schedules required, depending on the specific nature of your business activities during the year.

For calendar year taxpayers, the filing and payment of tax due date for these returns and schedules is April 15.

If you want an automatic four-month extension to file these returns, you can file Form 4868, Application For Automatic Extension of Time To File U.S. Individual Income Tax Return, by April 15. However, you must pay any tax you estimate will be due by April 15 or you may be subject to interest and penalties on overdue taxes. Your actual return would then be due on August 15.

 

Remember, the automatic extension only applies to the filing of your return, not to the payment of any tax that may be due. You must pay any tax that is due by April 15th, or you may be subject to interest and penalties on the overdue taxes.

If you can't get everything filed by August 15 and you decide that you want an additional two-month extension to file your returns, you must file Form 2688, Application for Additional Extension of Time to File U.S. Individual Income Tax Return, by August 15. This additional two-month extension is not automatic - you must give the IRS a reason as to why you need the additional time to file. If the IRS grants you this two-month extension, your return must be filed by October 15. Remember, the two-month extension applies only to the filing of your return, not to the payment of any tax you may owe.

 

Work Smart If you know you are going to need more time than the four-month automatic extension, it's wise to apply for the additional two-month extension as soon as possible. Because the second extension is not automatic, the sooner you know whether the IRS has granted it, the better!

Fiscal year taxpayers. If you are a sole proprietor who uses a fiscal year rather than a calendar year, you must file your individual income tax return (including all the applicable schedules) no later than the 15th day of the fourth month after the end of your tax year. You are entitled to the same automatic four-month extension to file your return that a calendar year taxpayer is entitled to, but you must file for the extension on Form 4868 by the due date for filing the return. The due date for the filing of your return is then the 15th day of the fourth month after the original due date of your return. You may apply for an additional two-month extension (which is granted at the IRS's discretion). You should file the extension request by the 15th day of the fourth month of your automatic extension.

If the second extension is granted, your return will be due on the 15th day of the second month after your automatic four-month extension was granted.

 

Among the Business Tools are Form 1040, Schedule C, Schedule C-EZ, Schedule SE and Form 4868. They are in Adobe Acrobat .pdf format, and you will need Acrobat Reader 4.0 to view the files and print them. A free version of Acrobat 4.0 is available in the Business Tools area as well.