In our online poll this week, we asked this question: “With the tax filing dates coming up, how will you file?” You can see the numbers in the poll results below, but I want to offer my perspective on them here.
We’ve asked the income tax filing question for the past three years. Even though the response options were a little different each year, here’s what I see comparing all three: The perennial filing practices for small businesses are split by about 60/40 for those filing on time vs the extension crowd. I want to think that’s good news, as that would seem to indicate more folks are a little better organized. But let’s be clear, there are many good and practical reasons for filing an extension without it being an indictment of your business practices.
Full disclosure, around here we always file extensions for both business and personal, and I recommend it to anyone who needs a little more time for whatever reason. I have it on good authority that filing an extension is not seen as a bad thing by the IRS.
There is one sad note in our poll this week. It’s the first time I’ve offered the option to select: “Won’t file any returns this year.” As will see below, a small part of our sample chose this. When a business is struggling, one of the things that often slips is paying taxes and filing returns.
Over the years I’ve dealt with the IRS on behalf of clients and for myself, in circumstances that were good and some that were not so much. My experience is that they’ve always been helpful. If you ever get into this condition, don’t wait — talk to the IRS as soon as possible, tell them your issues and ask them for help. They will help you. But the longer you wait, the longer it will take to pay off the interest and penalties.
Our tax code and the system are completely screwed up, but the people you’ll meet at the IRS are not.