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Tax situations are different for most businesses for the simple fact that all businesses are unique. This makes planning difficult for business owners working without the proper guidance. The complexity of tax issues that comes from these differences are more than inconvenient. However, there are three things every small business owner can do to avoid penalties in the tax year.
Most importantly on this list, as a business owner, you MUST know your tax filing due dates. After all, it would be impossible to prepare, plan, and file on time if you have no idea when the deadlines are. Your trusted accountant will certainly remind you of these dates and help to plan accordingly, but you should also have a good idea of when and how to act on these deadlines.
March 15, 2018: S Corporations (1120S) and Partnerships (1065)
April 17, 2018: C Corporations (1120) and Individuals (1040)
May 15, 2018: Exempt Organizations (990)
Although these initial filing dates have passed, it is important to schedule these dates as well as reminders in your calendar for the following year.
August 15, 2018: Exempt Organizations (With Extensions)
September 17, 2018: S Corporations and Partnerships (With Extensions)
October 15, 2018: C Corporations and Individuals (With Extensions)
What gets many taxpayers in trouble come deadlines, is a failure to pay tax liability throughout the year. Even if an extension is filed, the deadlines for paying income tax liability still stand. What’s worse is having to pay a late penalty with interest on top of the tax liability owed. This can add up to a hefty amount that could have all been avoided by paying estimates on time.
One thing the IRS provides in extreme rarity is extra time, such as with this most recent set of deadlines for the tax season. However, this won’t always be the case. In addition to late penalties and interest, there is also a late penalty for failure to file. For that reason, if you are doubtful in your efforts to prepare a return or deliver your organized documents to your tax accountant in time, file for an extension!
If you are able to check off all of the above, you’re a giant step closer to a stress-free business tax year.
By Ricky M. Hackler