If you can’t afford paying your taxes this year, you need to understand there are options. But not paying or ignoring the inevitable is just not an option…especially for small businesses.
Tax season causes many people to cringe at the thought of having to find the resources to write a check to the IRS. If you owe money this year, work with your tax advisor to find the best solution for managing the payment. Not filing will result in a failure-to-pay penalty which is 5% of the tax due for every month (or fraction of a month) that the return is overdue, with a cap of 25%. You could also be liable for levies and liens which could impact your credit rating, causing more problems. You can borrow money or charge your tax bill, work with the IRS for a payment installment agreement, or in certain situations, you may be able to reach a compromise with the IRS. Working with your tax advisor, you can come up with a plan that will satisfy your obligation with the IRS, with the least amount of financial penalties.
After you’ve made it through this tax season, take a deep breath and do an analysis of what you could do better and get ready for the next time around. If managing your business’s financials is part of the problem, consider working with an enterprise resource planning (ERP) software such as Microsoft Dynamics® GP. This comprehensive software solution will organize your finances, as well as streamline your financial operations. Microsoft Dynamics GP provides management capabilities for finances, supply chain, manufacturing, project and services management, and other business operations. Organizing critical data into a single software solution will highlight the relationships between the products and services you offer with your productivity and profitability.
The business intelligence and reporting features built in Microsoft Dynamics GP will provide greater insight into managing your money. Use the forecasting and predictive analysis features to estimate potential tax liabilities and set aside the cash you may need so that you can write your tax check when it is due. Paying taxes on time will eliminate penalties, interest charges, and other levies that could have a significant, and long-term, effect on your business.
Instead of dreading tax season, put your business on the right path to being better prepared when it’s time to pay the IRS. Microsoft Dynamics GP will help you manage your finances so that you are ready to pay your taxes when they are due. Contact eIS Business Solutions for more information about Microsoft Dynamics GP and how this ERP software solution can provide deeper insight into your financials.By Robert Smith of eIS Business Solutions, Microsoft Dynamics ERP and CRM Partner out of California