Did you just file your extended tax return? We spoke to accounting professionals and here’s why you might want to consider filing taxes in April instead (next year).
Extending your filing of taxes until October (September depending on your business structure) doesn’t save you on what you have to pay. In fact, it often costs you more, with late filing, you pay interest and penalties if you under paid your estimated quarterly taxes.
You are on hold for an extra 6 months for your development plans. Several of the CPA’s clients were in the process of obtaining a loan for their business, applying for grants to fund research and others, for their college student.
Not having current year taxes completed and the returns available for review can delay the process.
It can impact lending availability missing out on seasonal funding. What they mean by that is some organizations (including grants, non-profits and colleges) have a window when they can support requests – which tends to be more in the beginning of the year when organizations have just completed end of year fundraising initiatives.
If your equipment or inventory supplier is offering credit terms on a large investment or purchase, they want to know how viable repayment is. Sure, credit score is one part of the equation, but not having current tax returns can also impact evaluation of the financing company who is considering the business and their credit risk. If you are on the bubble based on their calculations, they may want to see current income tax returns – and they are the ones in control. You will have to provide them or wait for approval until you meet their funding requirements.
We know that extending filing is typically based on a variety of valid reasons: Bookkeeping, current P&Ls and being able to have all documentation available by the time your CPA and tax preparer needs the information and so forth. To that end, we want to remind you that we have some easy to use, and simple to integrate tools that might be able to help. Reach out to us if you want to learn more – and, if you are looking for a new CPA or accounting firm, let us know, we have a few good recommendations for you.
~ Mary Ann