File for a business tax extension with File Later<\/a><\/p>\n\u201cIn those cases, filing for an extension can be a great way to buy additional time,\u201d she says.<\/p>\n
Some cases that may legitimately require additional time could include the need for documentation of charitable deductions or new employee paperwork.<\/p>\n
\u201cSome tax return positions require that you have contemporaneous supporting documentation, such as an appraisal that supports a charitable contribution deduction,\u201d says Carolyn Linkov, a principal in Parente Beard\u2019s tax department. \u201cIf you don\u2019t have this documentation, you should extend the time for filing your return.\u201d<\/p>\n
Once you know you need a corporate tax extension, what should be your first steps?<\/b><\/p>\n
Most businesses will be eligible for either a six-month or five-month extension, depending on how the business is organized,\u00a0Becker says.<\/p>\n
\u201cThere is one major caveat that should be kept in mind while filing for an extension, however. The taxpayer will have to estimate how much, if any amount, is owed in taxes and pay this amount at the time of the extension request. If you fail to take this critical step, the IRS may invalidate the extension,\u201d he says.<\/p>\n
Corporations should start evaluating their tax liability as soon as the decision is made to file for an extensions, Becker says.<\/p>\n
\u201cIt will be imperative for you to consider all recent tax law changes as well as this year\u2019s gross income, taxable income, deductions and credits. One advantage of filing for an extension is that a business can spend more time analyzing its tax posture, making sure all available tax benefits have been realized,\u201d he says.<\/p>\n
With the deadline looming, who should you talk with or meet first?<\/b><\/p>\n
Business owners should at least correspond with their accountant, if not meet in person, Sweeney says.<\/p>\n
\u201cMany accountants are far more e-savvy and they\u2019ll respond to email more expeditiously than in the past, so email communication can work in some instances. When it relates to confidential information, however, some things may be better discussed in person,\u201d she says.<\/p>\n
Before you sit down for any chats, have your important documents on hand, including those pertaining to revenue and expenses, banking and investments.<\/p>\n
\u201cThis can be a lot of information for a business, so they elect to file the extension with the thought that they will reap additional benefits from write-offs or deductions they may have missed,\u201d she says.<\/p>\n
Also, if you anticipate owing federal income tax for 2012, make sure you sit down with leaders in your company.<\/p>\n
\u201cMeet with your company\u2019s controller or CFO or treasurer to make sure that there are enough company funds to pay the tax liability,\u201d Linkov says.<\/p>\n
Typically, should small businesses do their taxes themselves, or should they seek the advice of a professional?<\/b><\/p>\n
\u201cSmall businesses may find that the cost of hiring a professional is quickly offset by the discovery of write-offs and deductions they may not otherwise know,\u201d Sweeney says. \u201cEven if the small-business owner hires an accountant one year and thinks they can go it alone the following year because they already know all the deductions, the laws frequently change.\u201d<\/p>\n
Keep in mind that professional tax preparers can help guide you through some \u201csticky situations,\u201d Linkov says.<\/p>\n
\u201cCompliance with the federal tax law requires more than the filing of a tax return for a business. It also requires a small business to know which of its workers to treat as employees vs. independent contractors and what types of issues, transactions and industries the IRS may be focusing its attention on, through an increase in audits or other measures designed to increase transparency in tax reporting. All of these items a tax professional can identify and assess as part of a broader relationship,\u201d she says.<\/p>\n
Once you file for an extension, what should you look to accomplish in the extra time you’ve been given?<\/b><\/p>\n
\u201cAfter filing an extension, it\u2019s important to meet with your accountant and organize your records,\u201d Sweeney says. \u201cOrganized records will help you identify the sources of your income. You need this information to separate business from non-business income and taxable from nontaxable income. You will also need records to help you remember all of your expenses.\u201d<\/p>\n
To get a head start on what\u2019s required of you over the next few months, Linkov advises treating your six-month extension \u201cas if it is a much shorter period of time.\u201d<\/p>\n
\u201cJust because you have another few months to file your return, that doesn\u2019t mean you have to wait until the last day. So make a concerted effort to obtain the documentation or other missing information as soon as possible,\u201d she says.<\/p>\n
Once your 2012 tax return is ready to be filed, you can use the extra time to start planning for the 2013 filing season \u2014 and taking a hard look at what might have gone wrong this year.<\/p>\n
\u201cIdentify and address areas of your tax compliance and function that resulted in the need for you to file an extension,\u201d Linkov says.<\/p>\n","protected":false},"excerpt":{"rendered":"
If tax time is looming large for your small business, don’t be afraid to file an extension ‘ just make sure you do it right. Millions of Americans think of April 15 as a day they\u2019d rather stay in bed \u2014 submitting taxes is on no one\u2019s short list for a good time. But for […]<\/p>\n","protected":false},"author":1,"featured_media":7357,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[15],"tags":[48],"class_list":["post-911","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-small-business-taxes","tag-tax-extension"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/posts\/911","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/comments?post=911"}],"version-history":[{"count":7,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/posts\/911\/revisions"}],"predecessor-version":[{"id":11275,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/posts\/911\/revisions\/11275"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/media\/7357"}],"wp:attachment":[{"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/media?parent=911"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/categories?post=911"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/tags?post=911"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}