Filing business taxes is a requirement for all business owners each year. If you file your business taxes on time, then you only have to pay what you owe, and you move on with the hope that you won’t get audited. However, if you run into a situation where you must file your business taxes late, you could face penalties and extra expenses if you can’t provide a ‘reasonable’ reason for not being able to file them on time.
The Consequences of Filing Late Business Taxes
If you do not file your business taxes by the standard deadline of April 15th, then you have two choices. You can either file for an extension plus pay 90% of the total you will owe before the deadline, or you can face the consequences from the IRS for failing to pay your taxes on time. The consequences of not having your business taxes turned in on time are mostly financial, and they can result in you paying a lot of extra money out of pocket.
If you simply do not have the money to pay your business taxes when you file them, contact the IRS. They regularly work with people who are in a financial bind or undergoing some type of hardship, and set up payment arrangements. This will give you a little extra time to make your payments, but you need to make sure you are paying these payments on time, as the penalties for not paying could cost you as much as an extra 100% of what your remaining balance is, on top of having to pay that balance.
Not paying your business taxes by the standard deadline will usually incur a fee of up to one percent of what you owe in taxes, on top of what you already owe. This means that you end up having to pay more in fees and have less money to put into your company.
Contrary to popular belief, the IRS is understanding in some circumstances. Should you have been involved in some type of cause that made it quite literally impossible for you to file or pay your business taxes on time, you can file papers with them and have the extra penalties waived in some cases. If you can prove that you were, for example, in the hospital when taxes were due, they typically give you extra time to get the papers filed and business taxes paid.