Paying your business taxes on time and accurately needs to be one of the top priorities when running your business. Failing to meet your annual or quarterly tax obligations can lead to a number of serious consequences including heavy fines and a tax audit. Working with a professional and experienced accountant can help you keep finances organized and ensure your business taxes are getting paid on time.
Here are eight compelling reasons to file your business taxes honestly:
1. Avoid filing penalties and fees. If the government finds that your tax payments were inaccurate, you will be responsible for paying the full tax liability amount, as well as any late penalties and fees associated with the late-filing status.
2. Reduce a risk of an audit. Your company may be at risk of an audit now, and in the future, if there is any evidence that your company did not pay the appropriate amount of taxes in a given tax year. You can reduce your risk of an audit by making sure you are filing on time and by working with a certified accountant.
3. Avoiding an investigation. The government can perform a thorough investigation of your business and accounting practices if they detect your company is not paying the appropriate amount of taxes.
4. To avoid prosecution. Small business owners or self-employed businessmen may be subject to prosecution if they knowingly evade taxes.
5. Not carrying a tax debt. If you don’t want to worry about a tax burden as part of your business liabilities, make sure you’re filing your taxes as accurately and honestly as possible.
6. Preventing a tax debt from being reported to the credit bureaus. If the government finds that you actually do owe more taxes than you originally paid or reported, you will be carrying a tax debt that needs to be repaid within a certain time frame. If it doesn’t get paid, the government can report the incident to the credit bureaus.
7. Creating a track record of tax evasion. Once you have been found guilty of tax evasion, the government will take a much closer look at your future business activities, accounting practices, and tax reporting records.
8. To avoid legal fees. If you are found to be guilty of tax evasion, you may be subject to prosecution and will also be responsible for paying any legal fees associated with the situation.
Krisca Te works with Open Colleges, Australia’s leading provider of TAFE courses equivalent and accounting courses. When not working, you can find her actively participating in local dog show events – in support of her husband.