There is no quicker way to get in debt and get into serious legal trouble than failure to comply with the IRS. When it comes to taxes, mistakes can really hurt your business because the IRS typically charges penalties and fees for any unpaid money owed to them, regardless of excuses. Despite the importance of ensuring that tax filings are accurate, errors are so common that the IRS even offers some advice on ways to avoid making these last-minute filing mistakes. The agency’s tips for avoiding the top three most common mistakes are listed below.
Avoid a Penalty for Filing Late
Don’t delay filing due to inability to pay. Pay what you can afford with your filing and then wait for the IRS to contact you with a bill for the rest. Upon receiving their bill, give them a call to set up a payment arrangement or ask for an extension to pay. Many entrepreneurs starting out think the taxes will be too high to make paying them feasible. However, the IRS has many options to help business owners as long as they don’t have to chase down returns. Not filing your taxes in a timely manner will only cost you more money and possible legal issues.
Pay Attention to Detail
The IRS has a different form and rules for every possible issue under the sun. When filing the form for an extension on the deadline for filing your taxes, keep in mind that an estimated payment is still due in most cases. An extension of time to file is not an extension of time to pay, and as a result interest and penalties often continue to accumulate during the extension period.
Take Advantage of E-filing
The best way to avoid errors when filing taxes is to e-file. Paper returns have an error rate of about 13%. Many e-filing software packages help protect against errors by guiding the taxpayer through the process. This is also a great way to avoid missing the deadline to file since you don’t actually have to mail anything.
Filing inaccurate taxes and information can really hurt entrepreneurs due to IRS penalties and fees. To avoid errors, consider e-file. Avoid delays, but if there are any request an extension. Keep in mind that extensions can be filed for a later filing date. A good rule to follow is to get a head start on your taxes to avoid a last-minute rush that may lead to an error.
Another way to avoid the stress associated with filing taxes and ensure your tax return is completely accurate is to hire a tax specialist. A CPA will get your books in order and ensure your filings are free of errors and meet the deadline. Apart from this, CPAs will be able to assess your finances and discern whether or not there are additional loopholes and deductions that can further save the business money. If you want to avoid these and other common last-minute filing errors, give us a call today and let our tax specialists help your business maximize its tax savings.
This blog article is not intended to be the rendering of legal, accounting, tax advice or other professional services. Articles are based on current or proposed tax rules at the time they are written and older posts are not updated for tax rule changes. We expressly disclaim all liability in regard to actions taken or not taken based on the contents of this blog as well as the use or interpretation of this information. Information provided in this website is not all inclusive and such information should not be relied upon as being all inclusive.