Crunch time, again: Business owners who got tax extensions now face Oct. 15 filing deadlineBy Joyce M. Rosenberg, AP
Thursday, September 16, 2010
It’s tax time again for some business owners
NEW YORK — It’s income tax season again for many small business owners, those who got an extension until Oct. 15 of the deadline to file their returns. They have a choice: Get started now and compile their returns in an orderly fashion, or face another bout of eleventh-hour panic.
Even if your company’s books are chaotic or barely exist, you can still file on time. If your problem is lack of time or just plain procrastination, you can also meet the deadline. But in any of these situations, you’re probably going to need some help.
THE ROOT OF THE PROBLEM, AND THE SOLUTION
There are usually two reasons why small business owners are scrambling. First, while they intend to get their returns done, they’re busy running the rest of the business and so those Schedule Cs and Form 1040s keep getting pushed further down on the priority list. There’s just not enough time to do it all.
Or, owners have books that are haphazard or that consist of a checkbook and pile of invoices and receipts. The problem often is, again, a lack of time. But these owners are probably also running their businesses in a disorganized fashion.
Many of these owners got extensions of the April 15 deadline, thinking they’d get their returns together in less than six months. But many are in the same situation now. The solution: Don’t try to do it yourself.
The disorganized owner needs a bookkeeper or a bookkeeping service who will use accounting software to keep track of the company’s finances. For those worried about the expense, consider hiring an accounting student who can put your books together for you. Any of these options will help you meet the Oct. 15 deadline.
The owner who’s just time-pressed should be visiting certified public accountants or other tax professionals and have the returns done for them.
All owners should have certified public accountants anyway to help make tax and business decisions. In other words, think beyond the immediate crisis, and work toward preventing it from happening again.
DON’T EVEN THINK ABOUT NOT FILING
Some owners who believe they just can’t get their returns together may be tempted not to file at all. That is a huge mistake. The IRS is likely to hit you with a late filing penalty, plus penalties and interest on the tax you owe. The money you owe the government can add up quickly. Here’s the warning the IRS has for non-filers or late filers:
“Failure to file a return or filing late can be costly. If taxes are owed, a delay in filing may result in penalty and interest charges that could increase your tax bill by 25 percent or more.”
If you didn’t file a return last year, don’t assume that you therefore cannot file one this year. You can file now and still catch up to the return you missed, although it’s likely you won’t be able to do that without engaging the help of a tax professional.
Not filing can only lead to deeper problems. For example, if you want to apply for any type of loan, or for financial aid for your college-bound child, you’ll need to show your tax returns.
WHAT IF YOU DISCOVER YOU CAN’T PAY THE GOVERNMENT
Owners, especially those who haven’t kept good books, may find that they don’t have the money to pay the IRS. File your return by Oct. 15 anyway. The government recognizes that not everyone can pay right away, so it is willing to set up installment payment plans.
You can apply for a payment plan online on the IRS website, www.irs.gov. Or you can fill out and mail in Form 9465, Installment Agreement Request.
If you owe the government more than $25,000, you may need to complete Form 433-F, Collection Information Statement, which asks for information including your assets, liabilities and income.
Tags: Business And Professional Services, Careers, New York, North America, Personal Finance, Personal Taxes, Small Business, United States