Last Minute Tax Survival Techniques for Small Businesses

For small business owners who wait until the last minute to file their taxes as a small business, all is not lost. The delay in finishing tax returns until the last few hours of April 15 doesn’t mean they’ll end up in jail or fighting off the IRS. Help is available.

Start With The IRS
The place to start is the Internal Revenue Service. It has a small business section that can help with forms, publications, how to file forms electronically, and even has a video website to help small businesses.

If you need to file past due tax returns, the IRS website can help. If you can’t pay what you owe, you can request an additional 60 to 120 days to pay. You can ask for an installment agreement or you can apply for an offer in compromise to settle for less than you owe based on your ability to pay, income, expenses and asset equity.

If You Don’t File Voluntarily,
The IRS may file a substitute return for you, which might not give you credit for deductions and exemptions you may be entitled to. Even if a substitute return is filed, you can still file your own tax return to claim any credits and other deductions you’re entitled to.

A tax bill will then be sent, which will trigger the collection process if it isn’t paid. This can include a levy on your wages or bank account or a federal tax lien. If you’ve got about an hour to spare, the IRS offers a virtual workshop with a video to help small business owners. Nine lessons are offered, including how to run a business out of your home, and how to file and pay taxes electronically.

U.S. Small Business Administration
The SBA focuses on small business owners, and has a section of its website devoted to articles and other resources on filing and paying taxes.

These include articles on how to obtain a federal business tax ID, determining your federal and state tax obligations, and knowing when the tax year starts. A “tax year,” for example, can be a calendar year, or a fiscal year of 12 consecutive months ending on the last day of a month except December.

Seek Professional Help
If you’re really behind the eight ball and trying to file your small business taxes at the last minute, find a smart CPA or bookkeeper to help you. The expense can save you in interest and penalties owed the IRS later.

It may be hard to find a tax preparer who has the time late in the tax season to help you, since many business owners ideally meet with their tax preparer in October or November, and they still may be working on late returns.

Whatever help you get, go in prepared with your financial records, including records of all cash activity and reconciled bank accounts. This will give your CPA time to concentrate on tax-saving areas. Look for someone who has a lot of experience in your type of business. To get a possible price break from an accountant, do your taxes yourself and have them review your returns for any errors or missed deductions. Some tax prepares will charge a lot less to review a prepared return.

Get a Filing Extension
If you’re too hurried and worry that you’ll make some mistakes while rushing to file your taxes at the last minute, take a breath and request an extension from the IRS.

An extension doesn’t delay paying an expected tax obligation, but you’ll have more time to complete the return. You’ll still have to pay any estimated taxes you owe by April 15. The IRS allows an extension of up to six months, with different forms required, depending on the type of business you own.

If your small business tax return isn’t done by February, you may want to file for an extension so that you aren’t rushing to gather your paperwork and get the tax return done by April 15.