Missed the 2024 tax deadline? Here’s what to do now

So, you missed the 2024 tax deadline, huh? Now, your stress levels are even higher than they were trying to prepare. Have no fear, T2B is here! In this guide, we’ll cover not only the immediate actions to take today but also what you can do tomorrow to avoid this for future filings. 

Bottom line: Missed deadlines happen. But what you do to fix it will greatly determine the consequences you face! So, let’s get into everything you need to know to get you back on track. 

The Consequences of Missed Tax Deadlines 

First and foremost, let’s understand the consequence of missing the tax deadline so you know exactly what you’ll be dealing with. Per the IRS, here’s what you can expect in penalties and interest when not filing on time – 

• If you owe tax and don’t file on time, there’s also a penalty for not filing on time. The failure-to-file penalty is usually five percent of the tax owed for each month, or part of a month that your return is late, up to a maximum of 25%. If your return is over 60 days late, there’s also a minimum penalty for late filing; it’s the lesser of $485 (for tax returns required to be filed in 2024) or 100 percent of the tax owed. 

• Generally, interest accrues on any unpaid tax from the due date of the return until the date of payment in full. The interest rate is determined quarterly and is the federal short-term rate plus 3 percent. Interest compounds daily. 

Of course, there are a few things you can do now that you’ve missed the filing to help your case. Next, let’s get into the action items to take immediately. 

What To Do Now: Immediate Action Items  

Now’s the time to get back on track and ensure you never go off the rails again. To do so, here are three things you can do today to protect your business’ future and standing with the IRS.

Gather Necessary Documents

If you didn’t file your taxes for this year, it’s likely you don’t have a good grasp on all of the necessary documents you may need. Create a list of the following items, gather them today, and create a process to save this year and next. 

• Income Statement: An income or profit and loss (P&L) statement summarizes your business’s revenues, expenses, and profits over a specific period, such as a fiscal quarter or year.
• Balance Sheet: This document provides a snapshot of your business’s financial position at a specific point in time, showing assets, liabilities, and equity.
• Business Income Tax Forms: Depending on your business structure, you’ll file different forms. For example:
  • Sole Proprietorship: Schedule C (Form 1040)
  • Partnership: Form 1065
  • Corporation: Form 1120 or 1120S
  • Limited Liability Company (LLC): Depending on how it’s taxed, an LLC may file as a sole proprietorship, partnership, or corporation.
• Expense Receipts and Records: Keep records of business expenses such as receipts, invoices, bills, and bank statements. These are essential for claiming deductions and credits.
• Payroll Records: If you have employees, you’ll need to maintain payroll records, including wage and tax withholding information.
• Depreciation Schedules: If you have depreciable assets, you’ll need to track their depreciation over time and report this on your tax return.
• Sales Tax Records: If your business collects sales tax, you’ll need to keep records of sales and remit sales tax to the appropriate tax authority.
• Other Deduction and Credit Documentation: Depending on your business activities, you may be eligible for various deductions and credits. Keep documentation to support these claims, such as charitable donations, pension contributions, etc. 

Use Accounting Software 

Our next two action items are both things that could have saved you from missing the tax deadline in the first place. First up? Accounting software. While you may have been able to tread financial waters thus far without using accounting software, going this route can cause turbulent times when tax season comes around. 

If you’re looking to sail more smoothly throughout the years and have a better glance at your business’ financial health, investing in accounting software like Quickbooks is where to start. 

Accounting software will digitize and improve your small business’ finances, with automatic bank feeds, account categorization, and error reduction). With features like automatic notifications, and streamlined tax tools, a simple software addition is crucial to helping navigate you through tax time. 

Ongoing Bookkeeping 

Finally, more than just having software to help you sort through data, it is key to have a professional bookkeeper organize that data for your business’ advantage. Regular bookkeeping helps track income and expenses, reconcile accounts, and output specialized reports that can help small businesses scale exponentially.  

Even more, bookkeepers are well trained and versed in tax preparation and can work side by side with your tax preparer to ensure you’re maximizing deductions and minimizing any penalties or trouble. 

Most importantly, by outsourcing your bookkeeping as a business owner, you’ll gain more time to grow your business.

The Final Word: Stress Less at Tax Season

All in all, today you’ve learned, not only is filing your taxes on time important to avoid costly penalties and fines, it can be simple to do so with the right systems or partners in place. Take the time now to get your books in order and tax processes set to “auto” to ensure you’re stress free for next year’s tax filings. 

Call in the small business experts, and bookkeeping professionals at T2B. Starting as a small business ourselves, we know the importance of good books for financial health and tax purposes. 

Book a no-obligation consultation with our team and start next year’s taxes on the right foot today.