Three Things Accountants Say to Business Owners During Tax Season
Tax Day is finally here for 2022 and after working with my clients and talking to friends who also work with clients, I’ve concluded that no matter what happens, certain things need to be said to business owners every year when it comes to their taxes. After a brutal tax season, I’m here to share some of the most common things that tax accountants communicate to business owners when it’s time to file taxes. Try to remember these for next year:
An Extension to File is NOT an Extension to Pay
When a person or company is not able to file their taxes by the deadline (April 15th), they can file an extension to get some extra time. Most accountants know that this is a very common occurrence, and in most cases, there is no shame or judgment for extending a return. However, filing an extension does not increase the taxpayer’s time to pay any amounts that are estimated to be due with the return. What this means for some business owners is that come April 15th, their business and personal returns may not be complete, but a payment will still be due. So, if you think you can delay paying your taxes by extending your return, think again!
Deadlines Can Vary Between States and the Federal Government
Everyone knows (or should know) about the April 15th deadline for federal returns, but not everyone knows that each state can have a different deadline. For example, the state of Maryland extended its deadline to July 2022 for the 2021 tax year. As a result, many firms may not finalize Maryland returns until after the April 15th deadline. If your Company does business in multiple states, it will need to file multiple state returns and it's possible that not all of the state extensions will be done at the same time.
Due on Tax Day Does NOT Mean Do on Tax Day
If you give your accountant the tax requests three days before the deadline, they are probably not getting done and the returns are probably getting extended. Many accounting firms have a soft deadline for client information where anything received after a certain date is automatically extended. If you want your taxes done on time, you need to get your accountant everything they ask for well in advance of the deadline!
I’ll let you in on an industry secret: Accountants will work harder for their good clients. Even if you are paying your accountants to do the work, taking the time to learn how the system works and get them everything they need in a timely manner can make a huge difference in the level of service you receive. With that in mind, I hope you take these reminders into consideration for next year!