While you may still be enjoying the last few weeks of summer thinking that it’s too early to start preparing your business for tax season, you may want to reconsider putting your tax planning on hold—after all, the peak of the tax preparation period is just a few short months away.
While it is wise to engage in tax planning strategically and consistently throughout the year, if you haven’t done that this year, then now is the time to be proactive and get organized—especially if your business has fallen behind on any tax payments.
Here are a few tips to help you put yourself in the best position possible when it comes to filing your business taxes next year:
Make a plan to pay back taxes. If you have fallen behind on any of your business tax payments, start today to right the situation by creating a plan to avoid further penalties by making payments. Accounting professionals are usually well-versed in IRS problem resolution—including those involving non-payment of taxes, so don’t be afraid to speak up and ask for help to create a plan that your business can afford.
Be proactive about payroll taxes. If your business is behind on payroll taxes, consider discussing with our firm the possibility of using an IRS installment plan to get back on track. If your business owes less than $25,000 in combined tax, penalties and interest, and has filed all required returns, this may be an option.
Avoid paying fines related to retirement plans. For businesses sponsoring retirement plans, failure to file Form 5500 for annual reporting can result in fines as high as $15,000, so be sure that you are up-to date on this requirement. If you do have a penalty and were legitimately unaware that you needed to complete this filing, you may be eligible for the U.S. Department of Labor’s program to reduce or eliminate these penalties.
Start organizing your tax records now. Organizing your business tax records now can make filing taxes much easier and faster come tax season. It can also show you exactly where you stand in terms of tax payments and any penalties that you may be facing. Compiling your documentation well ahead of time will reduce your stress and allow you to easily file a complete and accurate return and make any provisions for payment plans or IRS problem resolution.
If your business has fallen behind on taxes or you are facing tax-related penalties, don’t wait until tax season is here—please consult our office so we can help you prepare and make a plan ahead of time.