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The Risks of Filing Corporate Taxes Late: What You Need to Know

 

Filing corporate taxes on time is critical to avoid penalties and mitigate risks. But what happens if you miss the deadlines? Let’s break it down and explore the implications of late corporate tax filing.

Understanding the Deadlines

There are two important timelines for corporate taxes:

  1. Payment Deadline: Any balance owing is due within 90 days of your corporate year-end. For instance, if your year-end date is March 31, the payment must be made by June 30.
  2. Filing Deadline: You have 180 days (six months) from your corporate year-end to file your tax return. Using the same example, the filing deadline would be September 30.

If you’ve paid your balance within the 90-day period and owe nothing, there’s no penalty for filing your return after the 180-day mark. However, if you miss the 90-day payment deadline and still owe taxes by the 180-day filing deadline, penalties kick in.

Penalties for Late Filing

Failing to pay your balance on time results in a 5% penalty on the total amount owing, plus an additional 1% per month for every month the balance remains unpaid. These penalties can add up quickly, creating unnecessary financial strain on your business.

Increased Risk of Audits

Late filing doesn’t just lead to penalties—it also raises your business’s risk profile with government agencies. A higher risk profile increases the likelihood of audits, adding another layer of complications and stress to your business operations.

How to Avoid Late Filing Issues

The key to avoiding penalties and audit risks is maintaining up-to-date bookkeeping records. With accurate and timely financial information, you can meet both payment and filing deadlines with ease. Partnering with experienced professionals ensures compliance and peace of mind, allowing you to focus on growing your business.

Avoid Penalties and Stay Compliant!

At Gauvreau | Accounting Tax Law Advisory, we specialize in helping businesses meet their tax obligations on time while optimizing their financial strategies. Contact us today to ensure your corporate taxes are filed correctly and on schedule. Reach out to us now to streamline your corporate tax process and avoid unnecessary penalties.

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