Summer is over and school is back in session. Time for us to leave the beaches behind and head back to reality. Not only is vacation time over, the second tax season has begun. Now, if you filed your returns in April, you’re in the clear. I’m talking to those of us who elected to file extensions to put off the dreaded task of paying Uncle Sam.
If you filed an extension, you should be aware that September 15th, 2019 is the IRS deadline (Pub. 509) for filing the 2018 tax returns for S-Corp and partnership businesses. The deadline to file an extension was March 15th, giving filers an additional six months to complete their filing. Missing this deadline could cost your owners a great amount of penalty and interest.
Failure to File
The income or loss computed on these returns are passed through to the individual filers or corporations who make up ownership. The IRS imposed late filing penalty is $210 for partnerships and $200 for s-corp. The penalty is per owner, per month, for a maximum of 12 months.
Failure to Pay
Since the pass through entity is not a taxpayer, the individual owners depend on the business return filing to get their personal returns filed. This puts an additional financial burden on the taxpayer. The IRS assesses an interest rate of 0.5% every month that the balance due, greater than $1,000, is not paid.
Failure to Pay Estimated Tax
The IRS requires taxpayers to make quarterly estimated tax payments if your total tax balance due is $1,000 or more. The best method for making these payments is through payroll withholding but most self-employed taxpayers are not invested in a payroll solution. Following the IRS require of quarterly estimated payments, taxpayers avoid penalties assessed for unpaid balances at year-end.
Tax filing deadlines are sneaky and catch up to us without notice. The task of gathering income and expenses for an entire year is dreadful and causes massive procrastination. Make that twice the burden for small business owners, especially s-corps and partnerships. The business deadline to file is 30 days before individuals.
If you are struggling to meet the demands of the IRS, don’t hesitate to contact us for a free consultation. Providence Bookkeeping & Tax Services is a leader in providing small businesses and individuals with excellent solutions.