Is it tax time? Frankly, it’s always time to pay attention to tax record-keeping, tax liabilities, and tax payments. To keep in the good graces of the IRS and to avoid penalties and unnecessary strain, it is important to know tax deadlines and comply with them exactly.
Why is it Important to File on Time?
From a practical standpoint, it’s important to file on-time to avoid last-minute scrambles with processing relevant documents, invoices and reports so that confusion and errors don’t result. Further, getting tax paperwork processed earlier gives each business owner a better financial view of the business, resulting in better cash flow management.
Most importantly, the IRS adds interest and penalties on taxes owed that are not paid on time. These are charges to be avoided:
- Interest is applied to all late tax payments. It is added to the balance due for every day that taxes are not paid in full, starting at the payment due deadline.
- Failure to pay charges are applied if taxes were filed but not paid. The penalty is 0.5% for each month that the tax bill is not fully paid, with a maximum penalty of 25%.
- Failure to file charges are applied if taxes were neither filed nor paid. The penalty is 5% of the tax balance due for every month that the payment is late following the deadline.
What are the Tax Deadlines?
Key 2020 tax deadlines for businesses are:
- January 15, 2020—Pay estimated fourth-quarter taxes for the tax year 2019.
- January 31, 2020—Employers mail W-2 Forms to their employees and to furnish 1099 Forms.
- March 16, 2020—S-corporations file income tax returns and pay for the tax year 2019. (Extended deadline is September 15.)
- April 15, 2020—Pay estimated first-quarter taxes for the tax year 2020.
—C-corporations file income tax returns and pay for the tax year 2019. (Extended deadline is October 15.)
- June 15, 2020—Pay estimated second-quarter taxes for the tax year 2020.
- September 15, 2020—Pay estimated third-quarter taxes for the tax year 2020.
9 Key Hints for Filing Taxes
- Gather all appropriate business records, especially including all expenses and business earnings.
- Use the correct IRS forms.
- Properly classify office equipment.
- Deduct insurance costs.
- Correctly record meal and travel expenses.
- Properly capture all miscellaneous expenses and deductions.
- Get all the data recorded accurately and avoid math errors. Complete the forms properly.
- Sign the forms.
- Pay close attention to tax deadlines.
Tax Filing Mistakes to Avoid
Avoid these mistakes that will cost unpleasant added expense and strain:
- Not paying attention to tax deadlines and filing late. If you think you will not be able to file the return on time, file an extension before the deadline.
- Not making all scheduled estimated tax payments.
- Not filing 1099-MISC and W-2 Forms.
- Not depositing withholding taxes.
- Misclassifying workers and their pay.
- Mixing business and personal expenses.
Get Expert Financial Assistance and Meet Those Tax Deadlines
Don’t handle tax processes and payments alone. Contact Doerhoff & Associates CPA, based in Jefferson City, MO for professional accounting and financial assistance that will help you achieve the business success you are striving for. Doerhoff & Associates has one goal in mind, to provide comprehensive business accounting and tax preparation services, designed specifically to meet your needs.