How To Avoid IRS Penalties
Nothing is serious as the IRS. They have their deadlines set in place and will come after you if you don’t file your taxes and don’t pay your tax bill. Remember this as the March 15th deadline for business income tax returns approaches. It looks like you have a little less than a week to file.
If you need more time to file, you can get an extension of up to 7 months with Business Tax Extension Form 7004. Just keep in mind that it only extend your time to file, not to pay your taxes.
Failure to file your taxes, file an extension, or pay your tax bill by March 15th will result in some hefty penalties and interest. The penalties are a little different based on business type:
C-Corporations that fail to file their returns are hit with a monthly 5% penalty on the unpaid tax return until the balance is paid. The minimum penalty, if not filed for more than 60 days is $135, or the unpaid tax amount, depending on which is smaller. 25% of the unpaid tax amount is the maximum penalty that the IRS can give.
S-Corporations that fail to file have to deal with a month 5% penalty on their unpaid tax amount until their return is filed. However, the penalty is limited to 25% of the unpaid tax.
If LLCs fail to file they are hit with a monthly penalty of $195. The penalty is per each managing member and can add up quick. The maximum penalty for this is 12 months.
Don’t let deadlines sneak up on you and don’t get hit with penalties and interest charged by the IRS, file an extension to give yourself more time to file instead.
Filing Extension Form 7004 with ExpressExtension
IRS Form 7004, or the Business Tax Extension Form 7004 is the application for the extension of time to file certain business income tax and other information returns. Depending on your business type and tax your you could receive up to an automatic 7-month extension to file.
Because extension Form 7004 is now automatic you no longer have to provide the IRS with a signature or a valid reason for needing an extension. As long as the form is correctly filled out and turned in by the original deadline your extension will be approved.
However, since 7004 does not extend the amount of time you have to pay your taxes you will have to pay a tentative tax with it. This is basically an estimation of the amount you’ll owe to the IRS.
Some businesses calculate their tentative tax based off of the amount they owed the previous year, but with economic turbulence, that method may not produce an accurate number. You can always refer a CPA or tax professional to help you calculate your tentative tax, just make sure your estimation is as accurate as possible.
Filing with IRS authorized ExpressExtension is easy. Simply create your free account and click ‘Create Form’ to get started. Then we will guide you step by step with instructions on how to correctly complete your form in a matter of minutes.
Before your form is transmitted to the IRS it’s scanned for errors so you can make any corrections before the form is sent off. Then you can view the status of your form in your account dashboard to see when it makes it to the IRS and when it’s approved.
If your form is rejected we will notify you via email, with instructions on how you can correct your form. You can then edit your form and submit it to the IRS as many times as necessary for free.
We’re always here to help. If you have any questions please don’t hesitate to contact our dedicated support team via live chat, phone, or email.
