Are you worried about paying your business taxes?
Perhaps you already know that you won’t be able to foot the bill.
Although you may be tempted to bury your head in the sand and try and forget about the looming tax season, you can’t run or hide from the fact that your taxes need to be paid.
Fortunately, there are options for businesses struggling to pay their taxes and companies that can help you take control of your finances.
Discover what to do if you can’t pay your business taxes and how to avoid any unwanted fines.
File your tax returns
Even if you know that you will not be able to pay the full amount that you owe, it is imperative that you still file your tax returns on time.
During this process, ensure you are taking advantage of any tax deductions or tax credits you are entitled to. For example, tax deductible donations that you have made to any charities over the course of the year or any business expenses that you can deduct.
Once you have done your tax returns for the year, make sure that you double and even triple-check everything, as you don’t want to make a mistake and end up paying more than you need to.
Ask for an installment plan
If you owe the IRS less than $50,000, then you can ask them to set up an installment plan that enables you to pay back your business taxes over a longer period of time (up to 72 months).
You can apply for this plan online or by filling out Form 9465, but be aware that this comes with a filing fee of $255 or $107 if you use direct deposits.
If you owe the IRS more than $50,000, you will need to provide full disclosure of your finances so they can determine if you have suffered financial hardship that has prevented you from paying your tax bill.
Offer in compromise
Offer in compromise is a program created by the IRS that enables businesses to reduce the tax they must pay. It is worth noting that this is not easy to do, and most businesses get turned down for this.
To apply for an offer in compromise, you must provide a comprehensive disclosure of all your finances and navigate a lot of complicated rules and regulations. If you choose to go down this route, it is highly advisable to hire a tax professional.
Pay using a credit card
Although setting up an installment plan with the IRS tends to come with lower interest rates, you may want to consider paying your business taxes using a credit card. This will allow you to rack up more points and eliminate the stress of owing money to the IRS.
Alternatively, you could ask family and friends to help foot the bill, but make sure that you arrange a pay-back plan that everyone agrees to before accepting any money from them and know exactly what they expect in return.