How to beat tax stress

It’s March and that means two things:  

1. Tax season is in full swing.  

2. Chicago winter is about halfway over.  

There isn‘t much a financial consultant can do when it comes to the weather, but when it comes to making your tax season less stressful and more enjoyable, we’ve got you covered.  

We’ve mentioned in an earlier post what you can do to get prepared, but once the New Year hits, there are still quite a few reports and resources you’re going to need to provide. Make sure you are proactive in sharing information with your financial team, especially your bookkeeper and CPA, and respond promptly to emails to keep the process moving. If you wait until the last minute you risk missing deadlines, adding extra stress and harming your relationships with your financial team. 

Important deadlines:  

• January 31 –Deadline to submit 1099’s to independent contractors and single member LLC 
• March 15 – Deadline to submit Corporate tax returns to the IRS 
• April 15 – Individual Tax Return deadline 
• Find more important deadlines here 

Mark your calendar 

The first and best thing financial consultants can do is to remind you early and often of the upcoming deadlines. April 15th may be etched into your mind, but for those owners in a corporate partnership or multi-member LLC, your deadline to file business taxes is actually March 15th. That’s a whole month earlier and means that your financial team has to prioritize your returns, reports and filings to get them in on time. 

The reason corporations and multi-member LLCs have an earlier deadline is because of paperwork. Just like you have to submit 1099s in January so your contractors can do their taxes, “members” of an organization have the same needs. Corporations issue documents called a K-1 to report income or losses incurred by individual members. (If you’re the SOLE member of your Small Corporation, you’re the only person who gets this document.) It’s included along with your Federal 1040.   

It also means that you need to be that much more proactive and on top of your finances to make the deadline. Good thing you have a partner to help! 

Getting lost with forms and numbers yet? That’s ok, just check with your CPA and financial team to keep you on track!  

Extensions aren’t just for celebrities 

The second best thing you can do is file an extension. No one likes to feel like they are behind and most of us just want to get this over and done with, but extensions can be a lifesaver.  

When you think about it, it’s hard NOT to want to file an extension. It takes away pressure during tax season, accountants are able to take more time reviewing your return during non-peak times and you have more time to compile your information. If you’re still trying to put together your 2021 end-of-year reporting, for your own sanity, just file an extension now.  

Still feel like you need to file by the deadline? That might just be in your head. As long as the IRS gets paid, they don’t care if you file an extension. What does this mean? Even if you file your extension, you still need to pay any tax due by the deadline in order to avoid any penalties or interest. And your financial team should never judge you for making proactive decisions that are good for yourself and your business.  

If you’re scrambling or stressing to get your taxes filed, avoid the panic and give your team the green light to file that extension. But do it sooner rather than later, otherwise, you will let the stress build for yourself and your accountant.  

Of course, there are many varieties of extensions, so be sure to discuss with your CPA what type of extension you need for your business or for yourself.  

Filing an extension will take the pressure off, but don’t take your foot off the gas. Keep up the hard work now and share your information with your financial team as soon as possible. Just because you can wait until September or October 15th, doesn’t mean that you should start on September 10th.  

Even with an extension, if you need a partner to sort out your financial puzzle, contact My Small Business Pro. We love unraveling your financial situation during May and June and will work with you and your financial team to create a strategy, process and insights so you can do your taxes with ease.