Smart Business Magazine, April 2014

6 Smart Business Orange County Spring 2014 DEBORAH SWEENEY LESSONS TO LEAD BY DEBORAH SWEENEY CEO MyCorporation com a leader in online legal filing services for entrepreneurs and businesses provides startup bundles that include corporation and LLC formation registered agent DBA and trademark and copyright filing services Deborah writes about issues that affect companies of all sizes and shares tips that she has found to be useful in her own business endeavors 877 692 6772 MyCorporation com Running out of time Four things you should know about filing a business tax extension Rather than rushing to file in a hurry a business tax extension is a major asset in a companys corner as it means getting extra time to prepare and file properly But what does being granted a tax extension for your business mean and what do you need to know when you decide to file for one Get your deadlines in order Typically the IRS approves business tax extension requests so long as they are submitted by 11 59 p m on April 15 They will grant you six more months to work on your taxes Use Form 7004 Application for Automatic Extension of Time to File Certain Business Income Tax Information and Other Returns on the IRS website and e file or send the form along by mail For companies organized as corporations and partnerships be sure you have the correct deadline in place for when your returns are due The extended deadline for calendar year 2013 S corporation returns is Sept 15 2014 Not extending this deadline to file may cause your S corporation to owe a 5 percent penalty of unpaid tax for every month the return is late with a cutoff point of 25 percent Partnerships with extended deadlines have 2013 returns that are also due on Sept 15 Failure to file on time can result in owing penalties of up to 89 a partner each month the return is behind for a maximum of 12 months Talk to your accountant Email and meet up with your accountant to evaluate your tax liability and any other confidential information Be sure to bring along any paperwork that concerns banking investments expenses and revenues Even if you feel confident that you can handle working on your own taxes federal tax laws are constantly changing An accountant may find some deductions and write offs you wouldnt have known about otherwise Make extensions part of your tax strategy NBCNews com mentioned that for businesses that need more time to contribute to a Simplified Employee Pension Plan filing for an extension can actually be extremely beneficial An extension on Form 5305 SEP Simplified Employee Pension Individual Retirement Accounts Contribution Agreement means that the extra time ensures the business doesnt need to have the money in place until the due date of the tax returns Use your extended time wisely Filing an extension puts you at much less risk of facing an audit than will rushing to get your forms finished by April 15 Its important however to bear in mind that once you file for an extension you need to stay organized and focused on getting your taxes filed If youre missing any documents work on obtaining them as soon as possible so it makes the filing process smoother Its easy to make the unfair assumption that if a business decides to file for a tax extension the leaders have been spending the months leading up to the April 15 tax deadline procrastinating on their paperwork But thats not necessarily true SOCIAL MEDIA To learn more about MyCorporation like its Facebook page www facebook com MyCorp and follow on Twitter @ MyCorporation