In January, mid-April may seem far away, but when you’re running a small business and filing your own taxes, twelve weeks can fly by, leaving you in a cold sweat as you see April 18th rushing towards you.
Don’t panic. You’re far from alone, and there is a path forward if you anticipate you’ll miss your filing deadline.
First, you’ll need to understand your business configuration. If your business is organized as a sole proprietorship, single member LLC, or C corporation, you can file an extension for submitting your return by April 18th. Please note that filing an extension will give you up to October 18th to submit your return. However, it does not give you a payment extension nor does it protect you from paying penalties or interest on any taxes owed.
If your business falls under another category such as a partnership, multi-member LLC, or S corporation, your tax filing or extension request deadline is March 15th, so filing an extension in April is not an option. This does make you vulnerable to being assessed for late filing and late payment penalties if you owe taxes. (For key filing deadlines see IRS Publication 509.)
Whether you’ve been able to file an extension or not, estimate and pay any taxes you may owe now. That is the single most important action to prevent any penalties or interest regardless of your filing status.
Once you’ve filed an extension, if eligible, and paid your estimated taxes, don’t breathe a sigh of relief just yet or put your tax filing back on the proverbial shelf. Take care of it as soon as possible. You’ll want to determine just what is preventing you from filing taxes. Have you not been able to keep on top of your recordkeeping, is there missing information or forms, do you simply lack the time, or is it something else? Perhaps the answer is “all of the above.”
Another question to consider is whether this is a pattern you find yourself repeating every year, or if this year proved more challenging because of business growth or other changes. Either way, if you don’t have bookkeeping support, this is the time you may want to strongly consider getting expert help in completing your requirements for filing now and getting your record keeping organized to avoid a repeat next year.