Failing to file tax returns on time or paying taxes late can result in steep penalties and interest. If you can’t finish your tax return on time – file for an extension – because penalties for not filing are much higher than penalties assessed for failing to pay on time. Penalties for failing to file run 5% of the unpaid balance per month, failure to pay penalties run 0.5% of the unpaid balance per month, and both are capped at a maximum of 25% of tax due.
Filing for an extension gives you 6 more months to file your tax return, but does not give you extra time to pay. Taxes are still due no later than April 15th and you will need an accurate estimate of your tax situation in order to file the extension forms. Business owners are sometimes unaware that failure to file penalties apply to informational returns even though no tax is due. Filing your W-2/W-3’s late and the penalty assessed can be as high as $10,000. S Corporations are assessed a penalty of $205 per shareholder for any month or part of a month the tax return is late. Partnership penalties for late filing are similar, $205 per month per partner.
Upcoming Tax Deadlines
March 15, 2020
- 2019 S Corporation Form 1120S Tax Returns Due
- 2019 Partnership Form 1065 Tax Returns Due
April 1, 2020
- First Required Minimum Distribution (RMD) for Individuals who turned 70-1/2 in 2019
April 15, 2020
- 2019 Form 1040 Tax Return and Taxes Due
- 2019 Corporation Form 1120 Tax Returns Due
- Schedule H to report Nanny taxes on Form 1040 are Due
- Q1 2020 Estimated Tax Due (Form 1040 ES)
- Contribution Deadline for Individual Retirement Accounts for 2019
- Last Day to Withdraw Excess Contributions to IRA’s for 2019 and avoid penalties
Contact a CPA in Golden Today for your Small Business Taxes
If you would like tax advice for your small business, please contact Karen Schwimmer, CPA, EA today for small business tax preparation and year-round tax planning. Karen Schwimmer, CPA, EA works with small businesses to reduce taxes, manage cash flow and improve profits.