Filing business taxes can be a headache, especially if you are trying to juggle your business operations and finances. Depending on how your business is registered, you may only be required to file business taxes once per year. However, it may be beneficial for small businesses to file quarterly taxes. Let’s take a look at some of the reasons why you may want to file your business taxes more than once per year
Carry Forward Loss
Filing business taxes is important for gains and profit of a business. It is important if you want to carry your losses to the next year and offset the amount of the future income. Also, if you’re going to forward the damage to the following year, you need to file your business taxes on or before the required date. This can lead to a decrease in taxable income, and it can reduce tax payable in the future years.
Applying for a Loan
Raising enough capital is an essential area if you want to grow your business. Small or large business requires some financial assistance. If you need funding, business loans help to alleviate them and create new opportunities for you. The main goal of getting a business loan is to grow your business activities. However, banks offer loan for most new file business taxes and the calculation of income as one of the important documents that you need to submit. Filing your business taxes regularly is important if you want to apply for a loan from the bank.
Budgeting
Making payments to the IRS before the end of the year also makes budgeting easier. Most business owners dislike dealing with taxes and do not calculate their tax liability or refund until the filing deadline. Suddenly realizing that you owe a large sum of money, which must be sent along with your tax forms, can result in a last-minute debacle. Quarterly payments, on the other hand, are much smaller and easier to handle. If you are one of the many business owners who does not enjoy dealing with the intricacies of finance, maybe consider leaving your companies tax preparation and finances to a qualified financial management company like excellent admin
Prevent Prosecution and Penalty
The evasion of income tax is a criminal offence, and you can be prosecuted if you fail to file your IT returns. Also, there are overdue taxes filing penalties which can be levied on you if you refuse to file returns on time. Filing your tax returns regularly for business is important if you want to avoid prosecution for late tax evasion or filing returns.
if you owe more than $1,000, you could face a penalty for the underpayment of estimated tax. A good number of taxpayers avoid this penalty by making estimated quarterly payments. However, if you fail to send enough in estimated payments to the IRS, they’ll tack on a penalty rate to go along with the extra money that you’ll owe.
Know What to Expect
Probably the most obvious reason to file quarterly taxes is that you’re more likely avoid any unexpected shock at tax time. If you don’t pay quarterly estimated taxes, you could be left with an overwhelmingly large, unexpected bill in April, which you may not have the funds to pay. And having to finance what you owe if you can’t pay your federal tax bill in full will only add extra fees and interest. Paying your quarterly estimated tax provides the peace of mind that you won’t be smacked with an unexpectedly steep tax bill in the spring.
Conclusion
There are quite a few marked benefits to filing quarterly taxes, and the ones mentioned here are just a few of the more common reasons why companies choose to file more than once a year. Consider all aspects of your business’s finances and budget and decide if quarterly financing is right for your company.