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Most business owners do their best to pay their small business taxes in full by the due date. However, it’s possible to miss a deadline because of too many daily responsibilities or a hefty bill that you can’t afford.
Can A Tax Attorney Help With Back Taxes
Filing and failing to pay delinquent taxes can lead to a number of problems and penalties. Here’s what to do when your business owes taxes so you can get your finances back on track.
Tax Avoidance Is Legal; Tax Evasion Is Criminal
According to the standard tax deadlines for businesses, most companies must file their tax returns and pay their full tax liability by March 15 or April 15 of the year, depending on the type of business (taxes are paid the next business day if the 15th falls on a weekend or holiday). If you don’t file and pay your taxes on time, your business owes taxes.
Remember, if you have a reasonable excuse for filing and paying your taxes late, the IRS will not charge you any penalties. For example, if a fire destroyed your financial records or you had a close family member die, the IRS will accept this as reasonable cause. In addition to the legal issues, there can also be financial consequences if you fail to pay your overdue business taxes. Failure to pay delinquent taxes can disqualify you from receiving a personal or business loan.
If your business is behind on your taxes, here are steps you can take to minimize the damage:
If you filed your tax return on time and discover you made a mistake, you must file an amended tax return.
Should I Hire A Cpa?
If you missed the tax deadline, you’re in luck: The IRS just made it easier to file your back taxes. In years past, all delinquent tax returns had to be filed on paper forms. With the introduction of Modernized e-File, you can electronically file your 1040 returns for the past two tax years. If you go back more than two years, or if you need to file delinquent taxes on Form 1040 that are not reported, you must file using paper forms. Corporations, partnerships, and multi-member LLCs typically use different forms for small business tax returns.
In this case, you must use the original forms for the tax years for which you are applying. In other words, this means you cannot use this year’s tax preparation software package or this year’s tax return to file last year’s taxes. Doing so can cause problems with the current year’s return and will almost certainly result in you having to re-submit an overdue tax return.
You can find any prior year tax forms you need — as well as instructions and tax tables for each year — on the IRS website. Just search for the appropriate tax form number or form title.
If your tax returns are more than a year or two old, you may have trouble finding your tax documents. If your business is your only source of income, you need to keep up with your bookkeeping so you can accurately fill out your previous year’s paperwork.
Back Taxes Or Tax Debt
This means you will have to recreate your books using your bank statements and credit card statements. Banks and credit card companies are better at accessing historical statements online, but if you use a smaller bank (especially local banks that don’t always have strong online banking services), you may have to request statements from them.
If you also have W-2 income from work, or if your spouse was employed, you will need W-2s for each tax year. You can ask your employer—or your spouse’s employer—for a copy of previous years’ W-2s. Employers must keep these records for at least four years, and many employers keep payroll records for much longer. Asking your employer for a copy of your W-2s should be your first course of action. This is also true if you were a 1099 recipient. Ask the business that paid you for a copy of your 1099. They must have a copy if they pay you $600 or more per year.
If you cannot receive a copy of your W-2 or 1099 from the payer, either because the payer is unavailable or because you owe back taxes that exceed recordkeeping requirements, you can complete Form 4506-T to request a record from the IRS . There is an online alternative to requesting a transcript. Just be aware that IRS transcripts only contain federal tax information. If you live in a state where you must file a state or local tax return, you should contact those tax authorities and ask if transcripts are available.
It is especially important to pay your bills before applying for a business loan. Most lenders require at least your most recent tax return to process a business loan application. Some of them require several years of tax returns. There are several reasons for this:
Settle Back Taxes With Jld Tax Resolution, New Jersey
Your lender will probably also ask you to review your company’s financial statements, but that doesn’t preclude your request to provide tax returns with your loan application. Your tax return doesn’t take the place of carefully kept books, but it’s usually the “final word” on a company’s assets and liabilities. Not all business owners work with an accountant who enters tax preparer adjustments into their accounting software. Your lender knows this and they want to check your tax returns to get a complete picture of your business assets and liabilities.
If you have an existing tax lien against your business, or if you are currently on an IRS payment plan, your eligibility for a business loan will depend on the lender’s specific requirements. Some lenders don’t care if the tax lien is subject to a certain amount, but others require that you resolve the tax lien in full before applying.
Some business owners are impeccable with their business finances, but their personal finances are far less organized. Depending on the type of loan desired and also the subjective structure of the business applying for the loan, many lenders want to take a closer look at the personal finances of anyone who owns 20% or more of the business.
The lender may even require a personal guarantee for the loan, meaning that if the business defaults, the owners or shareholders can stand up to repay the loan. That’s why personal tax arrears can be detrimental if your business needs financing.
How To Get Rid Of Your Back Taxes
Just as your lender will require your business tax returns so they can make a decision about whether you can repay a business loan, they will also want to see your personal tax returns to determine if you qualify. loan. For this reason, you should submit your personal delinquent tax return before applying for a business loan. If you have a business partner, encourage your partner to submit tax returns before applying for a loan.
About the Author: Billie Ann Accounting for the End of the Century. He is a QuickBooks Online ProAdvisor, a LivePlan Expert Advisor, a FreshBooks Certified Partner, and a Mastery Level Certified First Profit Professional. Read more
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As the new year begins and we inch ever closer to the fateful April 15th deadline, tax season is in full swing. Ideally, paying taxes should be a simple matter of filing a return and paying what you owe. Of course, it is often not so simple. If you have a complicated tax situation, own a business, own property, or have another unusual tax situation, you may need to call for help. If the IRS audits you, you may need representation. And if you owe taxes or have other tax-related problems, you may need an attorney who specializes in tax law.
Nationwide Trucker Back Taxes Attorney
A tax attorney is a lawyer who specializes in the complex of laws that deal with taxes. A competent tax attorney should be well versed in both federal and local tax law. like any
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