Even if you have the best intentions in mind, as a small business owner it’s easy to fall behind when it comes to filing your taxes. Working around-the-clock – answering calls, entering meetings, tending to customers and employees – leaves little time for assembling your tax documents or even finding a CPA.
If you need to file an extension so that you can submit your business’s taxes past deadline, then it’s best to get your paperwork in order now.
“Business tax return filing is a complex and time-consuming undertaking, and, while being prepared to file on the original due date may seem ideal, there are many scenarios where businesses simply won’t be able to file by that deadline,” says Matt Becker, tax partner at BDO USA. “There is one major caveat that should be kept in mind while filing for an extension, however. The taxpayer will have to estimate how much, if any amount, is owed in taxes and pay this amount at the time of the extension request. If you fail to take this critical step, the IRS may invalidate the extension.”
He added that it is imperative for all businesses to consider recent tax changes, the year’s gross income, taxable income, deductions and credits when filing an extension. He stated that extensions can be one of the best ways for businesses to spend more time analyzing their tax posture to ensure they take advantage of all available tax benefits.
Becker went on to note that most businesses are eligible to file for either a five-month or six-month tax payment extension. However, corporations do need to evaluate their tax liability as soon as they decide to file for an extension. In doing so, businesses may even be able to obtain savings and exemptions that they would not have made use of if filing on time.
To apply for an extension today, visit the IRS website to determine what form you need to complete.
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