Business Extension Deadlines Are Approaching: What You Need to Know
If you filed an extension for your business return back in March, your new deadline is now less than a month away. It’s important that you are prepared for this deadline, as you cannot receive any further extension on filing your business’s tax return. Here’s what you need to know about the extension deadline, and how you can prepare for it.
What Is the Extension Deadline Date?
Filing a business tax extension pushes back your filing due date by six months. Typically, this means pushing the due date from March 15th to September 15th. However, since September 15th falls on a Sunday this year, the official extension deadline is September 16th, 2019. Your tax return must be electronically filed or postmarked by this date.
What Happens If I Miss the Deadline?
As there is no option to further extend your tax return, missing the extension deadline would result in accruing penalties for failing to file. Of course, you can still file your tax return late, but you will end up having those fees added to your existing tax bill. Please be aware that late filing penalties increase over time.
Once you miss the deadline, you’ll be fined 5% of the taxes you owe for every month or portion of a month that your return is late. This fee is capped at 25% of your tax debt. So, every month that you allow to pass without filing, you’re accruing more fines. If you file more than 60 days after the extension deadline, the minimum penalty is $135, or 100% of your unpaid taxes, whichever is smallest. Obviously, it’s best to file your return before the extension deadline. But, if you miss it for any reason, you should still make efforts to file as soon as you possibly can, in order to minimize the fees tacked onto your tax bill.
What about the Taxes I Already Paid?
An extension to file is not the same as an extension to pay, so even though you filed for a business tax extension, you should have made an estimated tax payment to the IRS back in March. This would have been a rough guess of how much you would owe on your taxes. However, when you file your official return, this will be compared to the amount that you already paid, and any discrepancies must be balanced out.
If you overpaid, the excess payment will be sent to you through a tax refund. If you underpaid, you will have to pay the additional amount when you file your business return. Depending on how large the discrepancy is, you may also end up paying some fees and interest for late payment.
What If I Can’t Pay What I Owe?
If you’re receiving a large tax bill, and you’re worried about being able to afford it, there may be options available to you. First, please be aware that not filing your return does not make your tax bill go away; rather, it adds late filing penalties, late payment fees, and interest to your existing tax bill. You should always file your return, and if you can’t pay your full tax bill, the IRS offers a few payment plans and other options for taxpayers.
One of our tax professionals can help you to determine if you qualify for an Extension of Time for Payment of Tax, or we can help you work with the IRS to establish a payment plan or Offer in Compromise. Contact us to learn more about these payment options, and what the requirements are to qualify.
What If I’m Still Not Ready to File?
As we stated earlier, there’s no additional extension available for your business return. So, if you’re not ready to file yet, it’s important that you get ready as quickly as possible. Contact one of our business tax preparers, and we’ll help you determine what you still need to do to be ready for September 16th. We’ll go over all of the documents you currently have, and let you know what documents and information you still need.
We want to ensure that your business’s tax return is handled in a fast, efficient, and professional manner. We can help you to get your tax return prepared so that you can file by the business tax extension deadline. Just give us a call or schedule an appointment online today, and we’ll get to work so that you can avoid any unnecessary fees for filing your business tax return late.