Why Paying Your Business Taxes Late is a Problem
Are you late with paying your business taxes? Are you wondering what’s going to happen now? Paying your taxes late can lead to numerous consequences, from high fees and interest to the possibility of losing your property and even jail time.
High Fees and Interest
When you don’t pay your business taxes on time, fees and interest start incurring immediately after the due date. It’s important to note that although you requested an extension to file your taxes, your due date remains the same. The IRS will charge you a “failure to pay” penalty fee of .5 percent of the monthly owed balance until it is paid off. This penalty charge can increase to a maximum of 25 percent of the taxes owed.
Loss of Property
The IRS offers an option to set up a monthly installment plan. When you make prompt payments and keep your account in good standing, you will see your monthly interest rate decreasing. Owing $10,000 and more can lead to serious consequences. The federal government can now place a lien on your property, ultimately causing your credit score to be severely affected. The government can also take hold of your wages and even empty your bank account.
Imprisonment
Persons who intentionally choose not to declare their income can face jail time. This form of tax evasion is illegal and the harshest penalty can be given to anyone found committing this act. It is therefore important to make sure you file your taxes once you are earning.
Always remember that if you are unable to file your business taxes, you should request an extension before the due date. If you’re late paying your taxes, don’t be alarmed. At MWB Tax Solutions, our highly trained tax consultants can help get you through the process. So don’t hesitate. Contact us now to get started.