It is common for all of us that we miss flights, we forget to return important calls… and then some of us miss the tax deadline. There is an infinite number of reasons why a business may not be able to file their taxes on time, between demo days, investor meetings, and late-night team strategy sessions, the bookkeeping and tax preparation for an early stage company can often fall by the wayside.
The reasons may be many that you couldn’t finish filing before the date of tax deadline. Or you couldn’t figure out a large tax due. The good news is you can still file your taxes inspite your tax deadline has gone.
To get taxes filed after missing the income tax deadline, there are a few basic steps that business owners should take:
Start with your business entity type
SMLLCs, Partnerships, C-Corps and S-Corps can all have different penalties and filing requirements, so this is an important place to start in determining your next steps. (I’ll get into the various penalties later.)
Close your books and get a clean set of annual financials
To file taxes, you will need a complete set of financials for the fiscal year. If you do not already have a closed set of books, this will be the major roadblock to the filing after the tax deadline.
If you have not done it previously then you will want to bring on a bookkeeping or accounting service that can help pull everything together and close out the year. 2018 is approaching fast, and with that, the 2017 tax-filing season. Don’t fall behind on your taxes consistently as penalties add up because there is no pause button.
Identify any foreign filing requirements
If your business has international owners or officers, conducts business with foreign entities, or holds assets in foreign accounts, you may be required to file certain foreign forms. The IRS charges tens of thousands of dollars as a penalty for missing any of these foreign filings. In this article, we dive more into identifying different foreign activities, and as always, we recommend speaking with your tax advisor to understand your business’s requirements.
People in the following scenarios Typically end up with tax in the following scenarios due when their return is prepared:
- Those who have changed jobs during the year.
- Those who have significant interest income.
- Those who have capital gains income from multiple mutual fund sales or shares sales.
- If you own more than two
houses, or have multiple home loans, its best to seek professional advice for your return.
Tax filing has benefits
The Tax Department receives details of large transactions such as mutual funds’ investments or credit card bills or if you buy or sell property with value exceeding to some extent. There is no need to wait for the department to send you a compliance notice as Tax filing of your returns before tax deadline helps you put together a financial track record. This comes in handy when you are applying for loans or visas.
Don’t worry if you have never filed a tax return or have skipped filing for a few years. File your returns now. It’s a myth that the Income Tax Department will send a notice if you file after a gap.