The Importance Of Filing Small Business Taxes On Time
Some small business owners might be inclined to delay filing their taxes due to a concern over cash flow issues, but thankfully there are alternative financing options to help them cover these expenses if need be. Although filing taxes can be a burdensome and resource-draining endeavor, it’s still something that small businesses should get out of the way as soon as possible.
As of Jan. 1, the tax season officially began for businesses. This year’s official tax-filing deadline for businesses is March 15. It’s important for small business owners to take the necessary steps to file their taxes as early as possible. By getting business taxes out of the way quickly, owners have a much better idea over what the company’s financial liability will entail.
Waiting until the last minute to get this job done increases the possibility that an unexpected expense arises. In addition, scrambling to find the relevant documents, receipts and reports getting on March 14 also improves the chances for making a costly, last-minute mistake.
Not filing on time
Whether due to a lack of funds to pay taxes or because of a simple oversight, failure to file taxes on time will result in a monetary penalty. Not only can this be a hefty fine in the first place, but missing the deadline will continue to accrue interest until the return is filed.
Even if the company is unable to pay the taxes, it’s still imperative to file the appropriate paperwork. If necessary, it’s possible to set up a payment plan with the IRS that allows the business to make installments on the money owed.
If necessary though, there are extensions that can be filed as well. Sole proprietors can file a Form 4868, while all other businesses can file a Form 7004. These extensions do not eliminate or reduce the amount of money owed to the IRS, but they create additional time for owners to locate the necessary resources, such as a small business loan.
Meeting federal health care deadline
Perhaps one of the most important reasons to file taxes early involves the recently implemented Affordable Care Act (ACA). The new health care law has several stipulations that small business owners must be aware of.
Specifically, new ACA compliance regulations enacted this year mean businesses with 50 or more full-time employees must also provide employees with the IRS Form 1095-C, which serves a health care W-2. Much like the deadline for giving employees a typical W-2, the 1095-C must also be handed out to workers by Feb. 1. In addition to this new form that employers must distribute, there is also a new employer transmittal form that businesses must submit, which specifies what insurance is being provided and to whom it is being provided.