Tomorrow (Tuesday) will be the Ides of March. No, I am not referring to the Julius Caesar masterpiece by Shakespeare (or the history to which it refers). I refer to the due date for business tax returns.
If you haven’t filed your return yet, you have until midnight tomorrow night to complete your masterpiece. I have been working on a slew of them for weeks. (It seems that a bunch of our clients have gotten used to the IRS letting the deadlines slip. That ain’t happening this year- but our clients seem to have thought it would. Now, they are paying the price [we charge more for tax prep as the deadline is approached], And, we are under tremendous pressure to complete them in record time.)
When you operate a pass-through entity (partnership, LLC, S corporation) you are required to complete YOUR business tax return by the 15th of March. That deadline is chosen so that your stockholders or partners can file their personal tax returns in a timely fashion. (Obviously, back when the deadline for some of these forms was the 15th of April, it was pretty clear that folks who relied on the data coming to them from the K-1’s of these pass-throughs couldn’t process their personal returns in a timely fashion. Hence, the earlier deadline for these pass-through entities.) That is why the IRS really frowns upon those firms that fail to meet the 15 March deadline. Because that failure cascades manifold.
Now, to be totally honest, if your business has capital equipment, inventory, or multiple locations, then you probably shouldn’t be doing these taxes yourself. There are plenty of places where mistakes could be made- or you could be failing to obtain a legal deduction.
And, if you have been “monitoring’ your business using an Excel spread sheet, the odds are you are not tracking your expenses properly. We have so many clients who claim thousands of dollars in capital expenses on their spread sheets- but which lack the detail to prepare the required line entry on the Depreciation Form (4562). Others that fail to comprehend the vast difference between a repair and an improvement. Or, the payment of a credit card bill as an expense- as opposed to an item with multiple categories and amounts that must be tracked and entered properly on the tax forms.
But, if you are certain you have it under control (and you are willing to bet you aren’t wrong) , then get cracking. Finish your tax returns- NOW! The penalties for late filing are substantial.
How substantial? Is $ 210 for each month (or part thereof) enough- and that’s multiplied by the number of K-1’s the entity should have issued. If you have 10 partners, that’s $ 2100 a month….
Ready to get cracking now? Good!
