The taxes payables are different for different businesses, it depends upon the locality, niche and size of the business, nationality and other details. Since most of the people are really busy with their business activity, taxes can sometimes be an ignored subject, which is really harmful for your business. Failure in tax payment on time can lead to penalties and fees. Since the government and its rules are different for different localities, it is important to learn the taxation rules and regulations. This is applicable for even small business, home-based workers or online businessmen. If you don’t want to face legal consequences, it is better to learn about tax system of your area and be updated with its filing as well.
In the same regard, let’s know how you can manage your taxes from the first step you take in business.
From the day of your business’s inception, try to choose a correct legal structure.
Another thing to do is, to make sure you register for your taxes at the right time, paying late bills can lead to fees and penalties.
Documentations: The best thing to do is to keep every document related with your taxes intact. Prepare document for every tax related action taken, in that you can monitor and take proper actions.
The wisest thing to do will be to estimate the taxes beforehand and save little more money than margin to avoid falling short on payment later when time comes
The last but not the least would be to seek expert advice.
What happens when you don’t pay your taxes on time?
Taxes are one of the obligations that cannot be postponed. If there is postponing of taxes, penalties are to be paid. It is a duty of every one whether a businessman or common man to pay regular taxes. There several penalties associated when taxes are not paid on time.
Failure of filing taxes
If this is the case, you’ll face failure-to-file penalty. This penalty is five percent of the tax that is unpaid for each month in which your tax return was late.
Failure of payment of taxes
If you have filed your taxes but was unable to pay for it, penalty id .5 percent of unpaid tax amount for every month the payment is late and above that you will have bear interest on the unpaid money as well.
The amount can add up to become really a big financially crippling situation to you and your business. If you fail to submit taxes, Internal Revenue Service (IRS) can:
It can file order to claim parts of your property.
It can take away your business property
It can make you give up your refunds
Revoke you documents like passport or other licenses.
The list of stuff that IRS can do if you fail to file tax payments for a long time, looks really serious. Therefore, try to keep yourself updated with present tax-file regulations and file it regularly.
Be updated in tax area is not that difficult. It may seem little overwhelming at first, but if you become little more aware and learned, it will become a breeze. Remember, in order to let your business function smoothly, it is important to file taxes on time. Good Luck!!