Filing taxes can be an expensive and tedious process for business owners to endure annually. On top of the financial burden, it can be incredibly difficult to manage important tax deadlines. Failing to file your taxes by deadlines can result in significant fines and penalties. However, there still is a few options available to you if you believe you are unable to meet filing deadlines. If you can’t meet state tax filing deadlines, continue reading this post to learn a few possible solutions.
Assess Your Position
Assess your current position as deadlines are approaching. If you have paid all of your taxes, and are entitled to a tax refund, there are no penalties associated with late filing. You also do not need to apply for an extension. Depending on the state, your refund will be held from anywhere from one to three years past the original deadline. If you are able to file your taxes on-time, but unable to meet the payment deadlines, you face a failure to pay penalty. The percentage charged on your balance varies by state, however, it is often imposed on a monthly basis. Assess your position if you are quickly approaching tax deadlines.
Request An Extension
Consider requesting an extension if you are unable to meet tax deadlines. Unfortunately, extension filings impose their own stringent deadlines. In most cases, these deadlines are often long before the actual filing date. Be aware of this deadline in advance if you wish to file a business tax extension. Extensions again vary by state, however, most are issued in six-month periods. This enables you enough time to recoup any finances, pay off other expenses, and file your taxes. However, be aware extensions to file do not excuse you from paying taxes in the mean time. Doing so will still result in the same failure-to-pay penalties mentioned before. Consider the process for requesting an extension if you are unable to meet state tax deadlines.
Prepare To Pay Penalties
Prepare to pay the penalties associated with not meeting deadlines. While penalties vary state to state, most use a relatively similar structure. States impose a late filing penalty. This penalty generally ranges from 4% to 6% on the monthly tax due. In addition, some states impose an additional $100 fee for each month returns have not been filed. Generally, the maximum penalty one can encounter is 25% of the total balance. In most cases, it is still better to file on time even if you are unable to pay. Doing so avoids any additional failure-to-file fees. Review the associated fees if you are unable to meet approaching tax filing deadlines.
Consider Other Payment Options
If you are unable to currently pay state taxes, consider the other payment methods available. Many states allow you to make installment agreements to pay off owed taxes over a number of periods. This spreads out your payment and provides you sufficient financial breathing room. You can additionally pay taxes through credit cards. Apply for a traditional bank loan or cash advance to pay your tax balance. Consider the other payment options available to you if you are unable to meet tax filing deadlines.
Apply For An OIC
Apply for an OIC if you are unable to meet your state tax deadlines. An Offer in Compromise (OIC) are tax solutions for indebted businesses. With an OIC state governments accept a businesses current inability to meet tax deadlines. In exchange, they either forgive a portion of the tax debt, or offer long-term payment plans. Some states may reduce taxes for small businesses. Often, state governments review your current financial position and allow you to repay your debt over the course of three to five years. OIC agreements are additionally not available to individuals or businesses with current bankruptcy filings. If you are unable to meet deadlines now or in the foreseeable future, consider applying for an OIC.
Tax filing can be a difficult and tedious process. Costs can be expensive and deadlines can be difficult to manage. If you are unable to currently meet deadlines, assess your current position. Request a tax extension. Prepare to pay any associated state penalties. Consider other payment alternatives to traditional capital. Furthermore, consider applying for an OIC. Always ensure that you estimate taxes to save money early on. Follow this post if you can’t meet state tax filing deadlines and need quick solutions.