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Are you a small business owner with overdue tax returns? We understand that your business is your passion, and it can feel daunting to admit you need help. We’re here to tell you that it’s not reasonable to expect yourself to suddenly be an expert in tax and accounting once you become a business owner.  It’s okay, and expected, to need help.

Unfortunately, avoiding the issue of overdue tax returns only leads to bigger problems, as penalties and interest accumulate each month a return goes unfiled. Addressing these issues quickly is crucial not only for your peace of mind but also for the financial health of your business. Let’s get you back on track.

Fear Behind Delinquent Tax Returns

Everyone has their reasons for missing tax deadlines, and you’re not alone. It often happens when there’s no CPA in your corner, holding you accountable. While a healthy fear of the IRS is understandable, it’s important to know you can correct past mistakes and move forward with confidence. The worst thing you can do is ignore it.  Here are common reasons small business owners avoid acknowledging overdue tax returns:

  • Fear of facing the IRS
  • Embarrassment over falling behind
  • Concerns about complicated tax situations
  • Deciding to ignore the issue
  • Avoiding action due to anticipated penalties

With the right guidance and a clear plan, you can overcome these obstacles and set your business up for success.

Understanding Your Tax Responsibilities

As a business owner, you know you must file an annual tax return and may need to submit quarterly payments. If it’s been a while since you’ve done so, start by gathering important documents, such as your last filed tax return and any outstanding payments. Then, compile income and expense records for each unfiled year. If this sounds overwhelming, a CPA can help you organize your data, address any missing information, and outline your specific obligations to the IRS.

Pro Tip: Working with a CPA gives you access to expert knowledge that can help you understand IRS requirements, notices, and any audits that may arise.  They’ll also help hold you accountable so you don’t find yourself in this situation again.

The Costs of Filing Late

Filing your delinquent tax returns can be costly, and the expense grows the longer you wait. If you choose to work with a CPA firm, expect preparation fees for each year and additional fees if bookkeeping is required. On the IRS side, penalties and interest accrue monthly. Interest begins from the payment due date until the balance is paid in full, and both failure-to-file and failure-to-pay penalties compound over time. For a detailed overview of IRS penalties, see this: IRS resource on penalties and interest.

Seek Help Now

Whichever firm you choose to guide you, know they’ve seen worse cases than yours.  It is okay to go to them.  Admitting you need help is not admitting failure, it’s taking a (huge) positive step in the right direction. The right firm will help you see that, and will work with you to overcome these obstacles so that your business can be on the right track to future growth and success.

Falling behind can happen to the best of us, and what matters most is addressing the issue and taking steps to resolve it. By seeking help sooner rather than later, you prevent the problem from snowballing further. Partnering with an expert to regain compliance is invaluable, freeing you to focus on running and growing your business without the constant worry of overdue taxes. Imagine putting unpaid taxes behind you and focusing entirely on your business goals!

Final Thoughts on Delinquent Tax Returns

Dealing with delinquent tax returns can feel overwhelming, but it’s crucial to face these challenges head-on. Your business is your investment, and taking care of its financial health is essential to its growth. By understanding your responsibilities and taking action, you can turn the situation around. The sooner you tackle these issues, the more control you’ll regain, allowing you to focus on expanding your business and achieving your goals.

Don’t let fear hold you back—facing this now can lead to a brighter and more secure future!

Joy Lutz, CPA, CTP

I help our client’s keep more money in their pockets by implementing proactive tax strategies.

I promise you, working with a CPA and Certified Tax Planner can be much more exciting than crunching numbers and reviewing last year’s taxes.

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