As if your home-based business does not keep you busy enough, the month of April brings with it more than just those pesky rain (or snow) showers. That’s right, its tax season, and the deadline for filing your tax return is (gasp!) tomorrow. It is easy to understand why home-based professionals may procrastinate a little bit when it comes to filling out all of that tax paperwork. There is a lot of information that you must gather in order to prepare your tax forms, and you want to be sure that you include all of the necessary information and don’t miss any precious credits or deductions. If it is your first year in business, it may be even scarier because you may only have experience with personal tax returns, not business tax returns.
Today, the day before tax day, you have two choices if you have not filed your tax return yet. Option one is that you can get out your paper forms or go online to one of the many tax preparation sites and just power through that tax return. I despise numbers, but I was able to take care of my return a couple of months ago by using Turbo Tax – the home and business edition. While it was not free, it was easy, and I feel confident that I did it correctly. When you are done, either e-file your return or stick it in an envelope with a stamp and place it in the mailbox so that it can be picked up tomorrow.
If you cannot file your return today for whatever reason, make sure that you file an extension. While an extension will not delay your payment obligation if you owe taxes, it will let the IRS know that you intend to file a return, just not in time for the April 18th deadline. Whatever you do, be sure to file your tax return. Even if you find that you owe much more than you had expected and you do not know how you will be able to pay it, the penalties for failing to file tax returns are pretty harsh.
Once you file your tax return, if you are not able to pay the full amount taxes that you owe when you file, you may be able to work out an alternative arrangement with the IRS. For example, if you have recently been hit with a severe financial hardship like the loss of a job or the death of a family member, you may be able to get an extension of time to pay. Please be aware that filling out a Form 1127 to ask for more time to pay your tax debt does not guarantee that the IRS will grant you the additional time that you ask for. A more realistic option for many people is to ask the IRS if you can pay the taxes that you owe in installments by filing Form 9465.
In case you were wondering, I am not a CPA nor am I a tax professional. Numbers frighten me, and I have a great deal of respect and admiration for those people that can understand the workings of the tax code. Any suggestions that I have made regarding taxes are based purely upon common knowledge and may not be applicable to your individual situation. If you need assistance with your taxes, please consult with a qualified tax professional like a CPA or a tax lawyer. Also, Turbo Tax did not give me any money or other compensation in exchange for my mention of their product in this post.
Photo by doctor_bob on morguefile.com.