March Madness……for Business Owners…
Hi!!!…Its March and a sports fan favorite time of the year the NCAA finals. I’m such a girly girl that the only college basketball and brackets I know about is a scene from Love and Basketball. (lol). However as a tax professional/accountant, this is the season of TAXES. In March the corporate tax return (1120 and 1120s) are due by March 15th and the partnership/LLC tax returns are due by April 15th of each year.
What makes me MAD about March and small business owners?
The small business owner that waits till the clock runs down to hand me their prior year documentation….basically “traveling “with their documents to me at the last minute. Tax time is not the time to play defense and win the game of entrepreneurship. The entire year has passed and the SMB (small medium business) has not taken the time to review their books and records. The IRS requires businesses to have proper BOOKS and RECORDS. Proper Books and Records are a important part of your business FINANCIAL health. Just like in basketball there is a playbook of rules and if the rules are not followed the player will get charged a penalty…..the IRS has a handbook, the penalty handbook.
The “penalty handbook” includes:
-Failure to File
-Failure to Pay
-Failure to Report (IRC 6651)
-Accuracy related penalty (IRC 6662)
These penalties can start at 5% per month to 25% of tax liability. If the business tax returns are filed late the IRS charges each shareholder/partner of S-Corp and/or Partnership tax return a late-filing penalty in the amount of $195 for each month, or part of the month, that the return is late for up to 12 months.
I want to see all small business owners win at the game of entrepreneurship…..my advice is to
PLAY TO WIN.
For more tips please follow me on @grantsfinancial or call 312-265-1414
DeAnna Grant is a tax accountant located in Chicago, IL. She specializes in small business tax and accounting.
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