What to do When Your Tax Extension Comes Due

man in cafe

Every year many Americans find that they simply don’t have time to gather up last year’s information by April 15th, and they file for a 6-month tax extension. Small business owners, especially, may ask for a tax extension because they have to gather up income, expenses, various 1099’s, and other vital information before filing. 

If you were one such busy small business owner this year, watch out! That six months that seemed so far away back in April is quickly approaching. 

The deadline to file your taxes if you filed for a tax extension is October 15th! Are you ready? 

Your Taxes Are Due. Now What? 

Fortunately, you’ve now had extra time to gather your 2013 income and expenses, clarify any mistakes and make sure that all of your books are in order. Go over your business’s numbers one last time, and make sure you’ve gathered all pertinent paperwork. If you do your taxes on your own, now is crunch time! 

Accountants aren’t nearly as busy this time of year as they were in April, though they may be dealing with other clients like who filed an extension. If you have an accountant prepare your books, you should call him or her right away to make sure you’ll meet your deadline. Unfortunately, this six-month extension is the only one you get! If you’re any later, you’ll see fines and penalties. 

Also, while you didn’t have to actually file your income tax return in April, you did have to pay the amount you thought you owed. So when you finish calculating your returns you may find that you either owe more in taxes or you will get a refund. 

How to Avoid Tax Extensions in the Future 

There’s no shame in filing for a tax extension. Many small business owners’ taxes are complicated, and it takes time to get them in order. That said, isn’t it nice to get this yearly burden over with without it chasing you almost to Halloween? 

To help you prepare for next year, start a system to get your own books in order. Use a service like Bookly to help you keep track of all of your income and expenses. 

Establish a relationship with an accountant and meet with him or her at least annually to go over your books and any changes that might affect your tax situation. Set yourself a deadline – such as March 15th, to get your taxes in order and to your accountant. 

By the time 2015 rolls around, you’ll be less stressed about your income tax situation!