Why do Business Tax Preparation on Time?
Paying your taxes after due date can cause you a lot of problems, not to mention face some penalties. The Internal Revenue Service or IRS, are very strict when it comes to paying taxes on time. So, you should do your business tax preparation on time.
Below are 2 reasons why timely tax preparation is very important:
Avoid a penalty
In some cases, it can lead you to jail time for unpaid taxes but for late filed taxes, some of the penalties of IRS are the following:
5% penalty on the amount owed per month. You may be charged with interest, in addition to the penalty you have received. The IRS may opt to file a substitute tax return, which will not let you use any itemized deductions.
The penalty may depend on how delayed you are in paying your taxes.
Smooth flow of the Business.
Aside from these penalties, it can damage your reputation and at the same time your business too. Your business will lose credibility and some investors and customers may leave because of this. In order for your business to grow, you must not only focus on your products and service but also on tax preparation.
If you are currently facing a financial crisis and may not pay your taxes on time, you can try these options:
Apply for an installment agreement
- Request for a temporary delay. The IRS will review your request if you are really unable to pay, then if accepted, they will extend the collection date.
- Qualify for an offer in compromise. You can settle the unpaid tax debt with IRS for an amount less than the total balance you need to pay.
- File a title loan that will provide you a cash- this will help you avoid interest, late filing penalties and collections.
- These title loans have a lot of repayment plans, so you can pay off the loan that is suited for your current financial situation.
A timely tax preparation is vital for every business and entrepreneurs so this aspect should not be ignored. A business with a good service, products and accurate and timely financial will surely grow and attract customers and investors.