The IRS Tax Deadline and What You Need To Know

Wendy Cason

By Wendy Cason

Tags: All, Virtual CFO, Taxes, Accounting, S Corporation

TikTok the time is upon us! The tax deadline is just around the corner

 

If you're not ready, you do still have options! The IRS has been merciful but let us not forget, the IRS is the MASTER of penalties and fines!

 

You may want to file an extension if you haven't gotten all your firm's financials in order. Five out of seven business owners and individuals pay over 70% extra in taxes than they should each year.

 

Business tax planning is one of the most important processes you can do to stay on top of your firm's financial history throughout the year. Just the thought of doing taxes causes stress for many consulting firms because the accounting books are in disarray. 

 

Don't make costly tax mistakes because you feel the pressure to beat the IRS deadline! 

 

Here are a few reminders to ensure you are in an excellent position to file:

 

  • Gather all your business receipts for purchases over $75; the IRS does not accept credit card and bank statements as proof of purchases.
  • Report all your firm's income received for the year on your tax return; income is monies received for goods and services provided.
  • Write off your business meal expenses; the receipts should show the restaurant's name, the location, date, time, who attended the meeting, the total amount paid, and briefly state what the meeting was about.
  • AGAIN...Do not delay filing an extension if you are not prepared to file your taxes because this can cost you thousands of dollars in penalties and interest in the end.
  • According to the IRS, you must keep the records that support any income or credits shown on your tax return until the period of limitations for the tax return runs out; this could be 3 to 7 years, depending on your firm's circumstances.

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Keep in mind that filing for an extension does not apply to the tax payments deadline!  The tax payments for the first quarter were STILL due on April 15th; hopefully, you didn't get confused by this! 

 

Also, understanding that your business can file under the S Corporation designation is a benefit to eliminating the possibility of double taxation on the business's profits. Of course, you will have to determine if your firm qualifies to become an S Corp as described below:

  • Be a domestic corporation.
  • The shareholders must be individual U.S. citizens or green-card holders (resident aliens).
  • The S Corporation can not have more than 100 shareholders.
  • Have only one class of stock.
  • All shareholders must consent to become an S Corporation in writing.

Unfortunately, if you haven't done so already and plan to file your taxes by the new deadline of May 17th, Form 2553 must have been submitted to the federal government no later than two (2) months and 15 days after the start of the tax year when the election was to take effect. 

 

Hence, file for that EXTENSION! It's better to file later and use that extra time to consult with your accountant on the best strategies to prepare and organize your financials. If you don't have an accountant, finding the right financial advisor that fits your business needs isn't that hard. 

 

Say Yes To Profits is a click away! Again, delaying this time-sensitive and stressful process can cost you. We're here to take the stress away and get you the tax deductions and profits your firm deserves. 

 

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