Filing taxes can be stressful and time-consuming for any business, and filing late can intensify this pressure. Luckily, there are ways businesses can minimize penalties and take steps to avoid missing this crucial deadline in the future.
To take control of your back office obligations, business admin experts Vance have provided expert advice on what to do if you miss the tax filing deadline and how you can avoid missing tax deadlines in the future.
What to do if you’re late on filing business taxes
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Request an extension: If you are anticipating filing your taxes late but have yet to miss the deadline, you can file for a tax extension before the deadline.
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File as soon as possible: The longer you wait, the more penalties and interest you could be accruing. The penalty is charged at 5% per month for each month you are late, which is capped at 25% of your unpaid tax bill. This is an unnecessary expense for your business and can add up quickly.
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Pay any taxes owed: Make payments for any taxes owed as soon as possible to help reduce the amount of penalty and interest to pay. The Failure-to-Pay Penalty is separate from the Failure-to-File Penalty, and both can be applied in the same month.
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Contact the IRS: If you’re unable to pay the full amount owed, contact the IRS to discuss payment options. They may be able to offer installment agreements or other arrangements to help you pay.
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Seek help: Consult with a tax advisor or utilize an online service that can help you understand your obligations, minimize penalties, and ensure future compliance.
How to avoid filing taxes late in the future
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Set reminders: Set or use automated reminders for tax filing deadlines in advance so you can stay ahead. This ensures you can prepare and submit your returns before the deadline to minimize stress.
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Use AI for back-office administration: AI solutions like Vance can help manage back-office administrative tasks. These tools can manage business obligations and reduce the risk of missing important tax, or other, deadlines.
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Conduct regular financial reviews: Regular reviews of your financial statements and records helps identify potential issues early and ensure compliance with tax obligations.
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Stay informed: Stay up-to-date on changes in tax laws and regulations that may affect your business. AI tools, IRS newsletters, seminars, and other expert advice widely available will support you in staying informed and compliant.
By using these strategies, businesses can streamline their tax filing processes, minimize errors, and avoid late filing penalties in the future.