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Old 06-26-2011, 11:58 PM
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What to do if I haven't filed any estimated taxes and tax return for last year yet?

Last year my husband and I opened a C Corp on my name. It is a small auto shop and my husband runs the business. Due to lack of knowledge we haven' t filed estimated taxes through the year.Also we haven' t filed the tax return yet and missed the deadline to file an extension.
What should I do now and what penalties am I facing for those estimated taxes that we didn't file?As far as I understood I can file the tax returns and I will have to pay a fee based on the amount of taxes we owe. The company net profit won't be more that 30 000, should I expect high penalties?

Thanks for the answers in advance!



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Old 06-27-2011, 05:34 AM
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connect your country official site then you confirm the detail about your sites that is the way for the pay of the taxes if don't pay then you have some problems like extra charges you will pay in the next years.



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Old 06-27-2011, 01:15 PM
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“Due to lack of knowledge we haven' t filed estimated taxes through the year.Also we haven' t filed the tax return yet and missed the deadline to file an extension. What should I do now and what penalties am I facing for those estimated taxes that we didn't file?”---->First of all, if the amount on 1120 –W line 22 is less than $500, the corporation is not required to make estimated tax payments. Estimated tax is a corporation's expected tax liability after credits. However, as you said, as long as your estimated net profit of the C corp( estimated taxable income of the corp, I mean) is approximately $30,000, then UNLESS you r tax credits reduce your C corp tax liability by less than $500, as said above, you are subject to C corp estimated tax. In the case of your state estimated taxes, your state estimated tax laws are not the same as federal estimated tax laws.In general, you must also make quarterly estimated tax payments if you expect to owe tax of $500 or more with your return. As you didn't file your corp. tax return or pay taxes that you owe by their due date, the IRS( and your state govt.) will send you a notice hitting you with interest and penalties on both your C-corp and individual tax returns. Corporate tax penalties are punitive measures assessed against a business by various governmental agencies due to the firm's non-adherence to tax laws. Corporate tax penalties can be reduced or waived by the taxing authority in an attempt to resolve tax issues. The IRS and U.S. Department of Treasury state there are several types of corporate tax penalties. Negligence, when a reasonable attempt is not made to comply with tax laws, results in a 20 percent penalty. The substantial understatement penalty, involving understatements of more than $10,000, is 20 percent of the taxes understated (under reported). Fraud involves a 75 percent penalty.The IRS will charge you interest on taxes not paid by their due date, even if you've been granted an extension of time to file your return. Interest is also charged on the penalties imposed for failure to file a return as well as other penalties imposed for negligence,in your case, fraud, etc. This interest is charged on the penalty from the due date of the return, including extensions.So, C corp penalty is based on the net tax due, not a per-shareholder per-month calculation as is now the case with S-corps. An 1120 which is over 60 days late is assessed a penalty of the LESSER of the tax due or $135.However, it varies from state to state as far as I know ; for instance, some state charges interest on the amount of the underpayment from the original due date of the tax return (without regard to any extension of time for filing) to the date the tax is paid.In NJ, if a corporation does not file a return when due, or if the request for extension is invalid, add to the tax 5% per month up to 25%.
For your individual tax return on 1040, if you pay your taxes late, the penalty is usually 0.5 percent of the unpaid amount for each month or part of a month the tax is not paid. The penalty can't be more than 25 percent of the unpaid amount and applies to any unpaid tax on the return. This penalty is in addition to the interest charged for late payments. The IRS will also hit you with a penalty if you file your return late. If you don't file your return by its due date (including extensions), the penalty is usually 5 percent of the amount due for each month or part of a month your return is late, unless you have a reasonable explanation. If you think you have a reasonable explanation, write it down in a statement and attach it to your late return, and you might be able to avoid the penalty. In any case, the penalty usually can't be more than 25 percent of the tax due. However, if your return is more than 60 days late, the minimum penalty will be $100 or the amount of any tax you owe, whichever is smaller. Your corporation’s estimated tax payment due dates are Apr 15, June 15, Sep. 15 and Dec 15. However, its last payment is due on December 15 (rather than January 15 of the following year.). For state corporate tax penalties/interest on underpayment of estimated tax, you need to visit the Dept. of revenue of your state.
“As far as I understood I can file the tax returns and I will have to pay a fee based on the amount of taxes we owe. The company net profit won't be more that 30 000, should I expect high penalties?”---->As said above, and I guess you need to contact an( tax practitioner) and IRS agent nearest you in your local area immediately and need to file your late tax returns. If you wish to pay off a tax debt through an installment agreement, and owe: $25,000 or less in combined tax, penalties, and interest, then you can use the Online Payment Agreement (OPA) or call the number on the bill or notice (have the bill or notice available, along with the social security number). A fill-in Request for Installment Agreement, Form 9465 , is available online that can be mailed to the address on the bill. You may also request an installment agreement to your state. However, you STILL will be charged interest and a late payment tax penalty by the IRS( your state) on the tax not paid by March 15( April 15th for your individual return), even if your request to pay tax in installments is granted by the IRS( and by your state). Before requesting a tax installment agreement from the IRS, you should(MAY) consider less costly alternatives, such as a bank loan.I am NOT sure if this is your case, but If you have a refund, there is no penalty for filing late, but you are still subject to penalties for not paying taxes. Penalties are calculated on the amount due. Since there is no amount due, there is no penalty. Please visit the IRS Website; Online Payment Agreement Application



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