Laws & Legislation

 

02 07 2017

02 07 2017

Don’t Wait to File Your Small Business Taxes

Filing taxes is rarely a task anyone looks forward to, whether for individual or business taxes. Nonetheless, taxes are a part of life, and every American must address them at some point during the first few months of the year.

It’s fairly common to push this chore off until the very last minute. In fact, 21.5 million individuals waited until the very last week to file their taxes in 2016, FiveThirtyEight reported. While procrastination is tempting, there are a number of benefits that can come from getting an early start on tax season, especially for a small business owner.

Difficult deadlines

Most people know April 15 to be tax day, but this year, that date falls on a Saturday. The following Monday is Emancipation Day, a legal holiday in the District of Columbia, according to the IRS. That means the deadline for 2017 is April 18. However, some businesses will need to get their taxes in about a month earlier, according to Entrepreneur.

Corporations and s-corporations must file their taxes by the 15th day of the third month of your corporation’s fiscal year – that is, March 15, for those businesses that have a fiscal year that’s in sync with the calendar year.

Sole proprietorships, partnerships and limited liability companies have another month; they have until the 15th day of the fourth month of their fiscal year.

Remember, after you take care of your business taxes, you still have to tackle your individual ones. The sooner you file business taxes, the less likely you’ll accidentally miss your deadline, and the more time you’ll have to focus on your personal taxes.

Give yourself time to get it right

The concept of paying taxes is simple. Every person and company contributes a certain amount of money to the government, based on how much they make. To determine this amount for your business, you’ll need to analyze your income, losses and expenses.

However, the actual communication of this information is complicated. Mashable pointed out that, depending on what type of business you have, you’ll have to seek out a different form:

  • If you’re a partnership, use Form 1065.
  • If you’re a sole proprietorship, attach a Schedule C to your personal tax file.
  • If you’re a corporation, file Form 1120 separately from your individual tax return.
  • If you’re an s-corporation, file Form 1120S separately from your individual tax return.
  • If you’re an LLC, you’ll either file your taxes like a sole proprietorship or a corporation.

Given the complex nature of tax season, it’s not out of the question for you to make a mistake your first time around. Start early so that if you do make a mistake filling out a form, or try to use the wrong paperwork, you have time to go back and remedy the problem before the deadline.

Get your return faster

The sooner you file, the quicker that tax return will come your way. If you want your tax return as soon as possible, consider filing electronically. Century Link, a communications solutions company, pointed out that filing taxes electronically is fast, easy and convenient. Plus, when you enter your direct deposit information, your return will make its way into your bank account even faster.

More attention

Tax preparers know how much people tend to procrastinate on their taxes. When the calendar finally turns to April, their offices begin to fill up rapidly. When you come in early, there’ll probably be less demand and your tax professional may have more time to help you through the process.

Extensions are for paperwork only

If you find yourself strapped for time, you can always request an extension. But there’s a catch: You’re only asking for an extension on the process of filing, Mashable explained. If you think  you’re going to owe money, that payment is still due on the 15th day of the third or fourth month of your fiscal year. Of course, you won’t know exactly how much you’ll owe, so you’ll have to make your best guess. When you complete the paperwork portion of filing, you can correct any discrepancies.

Tax season isn’t exactly the most fun season, but that’s no reason to put it off. Remember, the sooner you get it done, the sooner you can stop stressing.

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