6 Late Filling Mistakes to Avoid

It’s essential for a business to pay their taxes on time since there are penalties and fees you’ll need to cover. There are a few common mistakes that often happens that lead to the late filling and that are caused by late filling in some cases.

You should avoid these if you want to make sure that you’re on good terms with IRC and that you don’t spend on taxes what can be avoided. This allows you to focus your resources both in terms of time and money elsewhere.

Doing nothing in April

It’s perfectly fine to calculate the extension into your plans for paying taxes. IRS is mostly OK with that and they factor in people being late as well, since it often happens, and those who pay their dues are allowed a bit of more time.

This however, doesn’t mean that you simply get another extra month or more. April should be the time when you let IRC know that you want the deadline to move and for you to get an extension. This means that you also need to showcase that you’re prepared to submit at least some of your tax documents and pay at least something in April.

The tax is not all you owe

It’s important to note that taxes aren’t all you need to pay to the government during the tax season. Thinking that way may lead you to believe that you’ve paid everything that needs to be paid, but you haven’t and you may end up in debt.

There are late payments fees and penalties that are assessed by IRS. It may happen that the IRS allows you to pay late but that they still charge you these fees for being late and they can go up to 0.5 percent of the whole sum.

When you don’t have to ask for extension

Asking for an extension is a process and it can take time and energy to do so it’s important to know when you don’t have to ask for one and there are cases when you don’t have to. There are two main cases when you don’t need to bother with an extension:

-If you have been affected by a natural disaster. If this is the case IRS will probably announce publicly how this affects those who are in the area.

-f you’re a U.S. citizen or resident who lived and worked outside of the country on the April deadline.

How much time you get?

For the most part the extension you get will last for 6 months since that’s the standard period provided by IRS. That means that your new deadline will be in the middle of October. If you’re amongst those that get an automatic extension don’t assume that you have an additional six months.

Those who haven’t been in the country and get their extension automatically only get two months. Those who have been affected by a natural disaster get as much IRS allows them.

Forgetting about the deadline

Even with the extension there’s a chance you may forget about your new deadline because there’s always something to do when you’re running your own company. When this happens IRS is going to be stricter since it’s happening with a new deadline.

There’s a first penalty of 5 percent when you’re late just a day from your deadline. The second penalty is for those who are more than 60 days late. This isn’t the case only if you have a reasonable excuse and the IRS has a list of those.

The relationship with the IRS

The fees and penalties aren’t the only problem with being late with your taxes. Many are worried about being late because it will affect their relationship with the IRS and they want that relationship to be as good as it can possibly be.

It’s important to have in mind that IRS is used to people being late. That happens every now and then and for the most part they won’t have a problem if you’re asking for an extension even when you do it more than once. This is true as long as you keep paying as well.

Conclusion

Filling your taxes late can be a problem for your business and you should try to avoid it whenever you’re able to. However, sometimes it’s best to ask IRS for an extension if you aren’t able to pay right now and you will be in six months. This won’t affect your relationship with the IRS and it will give you more breathing room.

It’s also important to know that there are cases when you don’t have to apply for extensions but those are rather rare. Have in mind that the fees still apply when you get the extension.