Are you finding it almost impossible to pay your taxes? If so, don't close your eyes and hope it goes away. Instead of your problems magically disappearing, it's only going to make your life a hundred times worse.
There are a few things you can do to avoid tax troubles when it comes to small business tax preparation. None of the options are ideal, but it's better than what might happen if you don't pay up. Let's look at some last-minute solutions that could save you.
1. Ask For A Little More Time
Maybe you're waiting for a few clients to pay large invoices, so you'll have the money within a few months. If you request more time, they may move the deadline. Just ask instead of not telling anyone you can't pay.
In Canada, you might be able to do a voluntary disclosure program (VDP) if you ignore your taxes. Other countries could have similar solutions to help you out, but you'll pay fewer penalties and interest by doing things on time.
2. Speak To Your Family Members
Do you have a rich uncle who has so much money he'll never spend it? If your mom or dad has a great job, they might be able to help you out. Even if it's just a loan, you won't need to pay lots of interest on it.
You may have to give someone a piece of your company, but it's better than going out of business. It's worth a shot if your family has money to spare. Avoid asking if you think it's only going to slow down your demise.
3. An Offer In Compromise Is Good
The taxman loves it when you send him all your money, but you'll sometimes be able to arrange an Offer in Compromise. If you're allowed an OIC, you'll be able to negotiate an amount you'll easily be able to pay.
When the government realizes the alternative is zero, they'll normally be willing to get as much as possible from you. Unfortunately, you'll only be allowed an OIC if they know for a fact you can't pay your taxes.
4. Pay Your Taxes In Installments
If you have money coming into your business regularly, paying your taxes in installments will work out fine. When you call to tell them you can't afford your taxes, tell them you want to pay a small amount every month.
You might be allowed to pay monthly if the total amount you owe is under a certain number. If you apply online, you won't even need to speak to anyone. You can't miss any payments once you've set up the installment plan.
5. Use A Credit Card To Cover Taxes
It's never a good idea to get into more debt, but you can get a credit card if you're desperate. You'll find lots of great deals if you look around and if you're lucky you won't need to pay interest for over a year.
That should give you enough time to get your financial situation under control. You will need to see if you're allowed a credit card before you do anything else. If the limit isn't high enough, you could run into problems.
Get Everything Back On Track
Once you get your taxes sorted out, make sure you don't end up in another mess. It's going to leave you feeling stressed non-stop. You may hire someone to work on your tax preparation every tax season.