As a business owner, you must be aware of the importance of timely filing taxes. But still, you are not alone if you have fallen behind on your taxes. Almost 33% of Americans put off filing their taxes until the last minute. The reasons for putting off paying taxes differ. Some people find it too time-consuming and frustrating, while others are concerned about filing correctly. A CPA in Hollywood, FL, can help you file your taxes correctly, so do not hesitate to seek help if you want it.
For whatever reason, missing the tax filing deadline may be costly, particularly for businesses. What happens if a company fails to file its taxes by the deadline? The Internal Revenue Service (IRS) can issue you a bill for penalties and other expenses. Nonetheless, tax filing regulations and laws change from year to year. It is difficult to keep up if you do not have your accountant or business tax services.
Tax filing deadlines
Taxpayers have different tax filing deadlines depending on the type of business entity. S corporations and partnerships are generally due in March, whereas C corporations and sole proprietorships are due in April.
Penalties
Everyone’s circumstance is different, but if you have not filed your taxes, likely, you have not made your tax payments either. You will face IRS fines if you fall into one of these categories. There are late filing and late payment penalties. Two factors will determine the severity of these sanctions:
- How long do you submit or pay your taxes after the tax filing deadline?
- How much tax do you owe?
If you fail to file your tax return by the deadline, you will be penalized 5% of the unpaid tax for each month the return is late. If you fail to pay your outstanding taxes on time, the standard fine is 0.5% of the unpaid tax amount for every month it goes unpaid.
Fortunately, these penalties are limited to 25% of the entire tax amount owed. This means that the 5% failure-to-file penalty is capped at five months. If both fines are imposed within the same month, the maximum fine is 5%. You pay a 0.5% late payment fine and a 4.5% failure-to-file fine.
The IRS is very serious about collecting taxes, so staying ahead and catching up on your taxes before things reach the collection phase should always be plan A. If you are having problems dealing with your taxes on your own, you should immediately ask for the help of an experienced CPA.
